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“Best lawyers,” needed to renegotiate agreement with ExxonMobil – Jagdeo

Opposition Leader, Bharrat Jagdeo on Wednesday urged the Guyana government to hire the best legal brains to renegotiate the profit sharing agreement with ExxonMobil.

“The government should hire the best lawyers in the world to make sure we engage. Get some advisers who can help with this sector,” he told a news conference. He said countries with oil sector experience  like Norway should be asked to assist Guyanese negotiators “so that we get the best deal” from ExxonMobil.

Jagdeo said it would make no sense just renegotiating the pact with that American oil giant and merely tabling it in the National Assembly because that law-making body would be unable to make any changes.

Instead, he wants the contracts to be made public before they are signed and that they can withstand scrutiny.

He argued that it was important for Guyana’s legal team to get the best deal from Exxon-Mobil, a globally powerful and influential oil company, that would survive any party in government. “It is absolutely important that we get the best agreement for the country given that we are negotiating with a company that is massive, massive by US standards. They have the best technical people in the world working for them,”  said Jagdeo, a former President.

Minister of Natural Resources, Raphael Trotman has been quoted by Oil and Gas Year as saying that government has to “ensure that we have lawyers that can advise on production-sharing agreements (PSAs).

He was also quoted as saying that the PSA with ExxonMobil was signed in the 1990s and it was now time to relook that agreement to ensure that the country extracts the best benefits.  Naturally, yes. For example, the PSA agreement with ExxonMobil was signed in the 1990s. Looking ahead, we want to make sure that Guyana gets a good share – 50% minimum. We would also like to ensure that royalties are in place, and we have to look at the issue of taxation again. Some countries favour paying taxes themselves,” he said.

The Minister of Natural Resources said government would like the PSA to take account of adjustments based on the price of oil and the cost of production. “As price goes up, you would expect to see increases in revenue rather than just have a base take. These are features we want to improve on,” he was quoted by the publication as saying.

Trotman said Guyana prefers long-term contracts with credible international companies. “We do not want to send a message that we are interested in short engagements. We want to build strong credibility and a sense that companies can come and feel secure here, develop their resources and function.”