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No cheap fuels, electricity for Guyana from ExxonMobil oil, gas deal, says PSC

FLASH BACK: ExxonMobil’s Country Manager Rod Henson (left) receiving the Production License from Minister of Natural Resources Raphael G.C. Trotman.

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.

  • Kassem_B

    ‘“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.’
    Not in the least surprised
    And
    The Case for a Refinery on a suitable long term Guyana soil owned initially by Joint Venture of Guyanese (including diaspora) and reputable Oil & Gas Operator.
    This is the only medium and long term solution for the Oil & Gas Industry

  • 52+RacismbriberyBackwardness !

    guyana has been screwed left,rifht,centre,left,right,69,96,upside down and in all which way possible
    business is business
    d rich get richer – thanks 2 d poor
    ppp,pnc,afc have sold out guyana
    foreigners fleece and flee guyana

  • Kassem_B

    ‘No cheap fuels, electricity for Guyana from ExxonMobil oil, gas deal, says PSC’
    Interesting headline and article.
    Hope all political Parties are taking note and cannot say they were not warned or at least raise the flag

  • S. Pertab Naraine

    Why this should surprise anyone is beyond me. This is just another page in the history of Guyanese politics, crooked Guyanese politicians and political flim-flammery….all at the expense of the country’s economic health. From the very beginning of our history, the colonial powers, in one shape or another, have been raping, pillaging, ravaging and robbing Guyana and allowed to escape with their ill-gotten booty…all of which was aided and abetted by our cheating, low-life Guyanese politicians and other leaders. At the time of independence in May 26, 1966, the foreign-owned industries could have been subjected to tighter tax laws and legislation to make them return their profits to the Guyanese people in the form of investments and improved pay rates for their work. Instead, the newly chosen government (yes, the first government was ‘chosen’ by direct American & British intervention in our so-called free elections) decided that they would nationalize these profitable industries which they eventually ruined through racketeering, pillaging and unqualified management. Now we see the newest of our possible industries being sold out from under the Guyanese peoples’ nose by another corrupt and avaricious government. Oh, Greenland of Guyana, indeed, where the green is the color of the money that our leaders will be depositing in their overseas accounts.

  • MyFun1

    For once I have to agree with King Rat (Jadgeo). Who ever led the negotiating team should be asked to explain what were the considerations the team used in arriving at a consensus of the terms & conditions so written in the Agreement with Exxon Mobile.

  • Charles Selman

    Ain’t we got Trotsee and Baseel. What more experts we need?
    We will be worse off than Venezuela now is.
    I wish KN can “skin up” the oil card with greater fervor.
    Are we truly better off under this Administration?
    Can we stare ourselves in the mirror and answer that question?
    I have lost all faith in the AFC for whom I cast my vote. They betrayed me.
    Selman

  • powerplayer

    Mr Opposition leader

    Entertain the idea that Exxon knew of the larger find at time of signing contract.

    Exxon cannot erase or hide that trail.

    Entertain the fact that the burden to prove otherwise is up to Exxon Mobil.

    Now milk that to the end. Follow it where it takes you. Call their bluff Think of country here.

  • Gerald La Touche

    While the blatant exploitation of developing nations by the developed West used to be a bad joke in International Development discourse, it is heart breaking to see that in the 21st Century a ‘Third World’ government is still selling away the future billion dollars inheritance of generations, for a few million dollars today. Short-sighted does not even begin to do justice to the future damage that this will cause – this is how you eventually end up in the future with a Chavez or a Mugabe, trying to put right such blatant injustice!