The Private Sector Commission (PSC) on Saturday said the oil deal with ExxonMobil would not see Guyana getting a significant amount of oil and gas to help stimulate and grow businesses.
“Nothing in the agreement,” the business body said, paves the way for Guyanese to pay less for electricity and fuels. “The business sector and general populace of Guyana deserve to benefit directly from the abundance of oil at its disposal and we look forward to seeing future Agreements for other blocks offshore include provisions with greater benefits to Guyana and its people,” the PSC said.
Opposition Leader, Bharrat Jagdeo, charging that the renegotiated contract has harmed Guyana tremendously, said government failed to understand basic economic concepts such as time value of money which would result in a loss of billions of US dollars in natural gas. “This could be a multi-billion dollar sector in the future and we didn’t even do a feasibility study before they went into the negotiation,” said Jagdeo, a former Finance Minister. “What we have given up are billions of dollars into the future to get a few million dollars now,” he said.
The business organisation also criticized the 2016 agreement between government and the ExxonMobil-controlled Esso Exploration and Production Guyana Limited (EEPGL) for blocking additional cash flows to Guyana.
“A matter of great interest also is the fact that given the early stage of development, Guyana does not have the right to re-negotiate the terms of the Agreement. This is specified in Article 32, Stability of Agreement Clause, of the contract. We are concerned, since this Agreement encompasses the entire Stabroek Block , an area of 6.6 million Acres of water with 3.2 billion barrel of equivalent oil (BOE) so far,” the PSC said. The PSC called for “increased flexibility” to the Guyana government to “ensure a fair and equitable deal on both sides.”
The agreement states that “After the signing of this agreement and in conformance with Article 15, the government shall not increase the economic burdens on the contractor under this agreement or by applying to this agreement or the operations conducted thereunder any increase of or any new petroleum related fiscal obligation, including, but not limited to any new taxes whatsoever, any new royalties, duties, fees, charges, Value Added Tax or other imposts.”
The PSC called on government to hire the best experts to negotiate with operators/ contractors of other offshore blocks to ensure that Guyana receives more royalty, rents, training and development for Guyanese and better local benefits for all Guyanese. That, the PSC said, would be possible only “through the enlisting of the services of world class negotiators who can competently negotiate with major oil companies.”
The Opposition Leader questioned the fuss over US$350 million annual earnings from ExxxonMobil because if 75,000 government employees and pensioners get allowances and subsidies of GY$60,000 each, that money is almost finished. At the same time, he said forestry and sugar have virtually collapsed.