Minister of Natural Resources, Raphael Trotman on Monday defended the 2016 agreement between United States (US) oil giant, ExxonMobil, and Guyana, saying that there were several risks including Venezuela’s unresolved border claim.
“They were the only company willing to operate in certain areas and that is areas tending towards the north-west- the Venezuelan border-there were no other takers and so that is why we thought they would just maintain the same acreage which they had prior that and they were the only company that was prepared to take the political and economic risks that come with that,” he said.
Noting that persons have been expressing concern about what Guyana did not get in the contract but are losing sight of the achievements, he said ExxonMobil was the only company worldwide that was willing to invest billions, prepared to take the economic risk at a time when global oil prices had plummeted to US$30 per barrel in 2015, risk investing in a sometimes politically unstable environment and take the security risk associated with a border claim.
“It is the only company that is prepared to take the security risk, bearing in mind the threats and demands made from elsewhere that what we have is not really ours but is someone else’s so zero from zero leaves you nothing so if you have oil in the ground or trees standing but nobody wants to touch them, they are worth zero,” he told an Alliance For Change (AFC) news conference.
The Natural Resources Minister said with ExxonMobil’s investment, Guyana would not only earn US$7.5 billion in less than a decade alone from Liza Phase One but was also attracting previous and new investors.
Concerns have been raised that Guyana should have been entitled to much more, perhaps hundreds of millions US dollars, than a US$18 million signing bonus. Also, observers have noted that in the new agreement Guyana would not be entitled to a periodic production bonus or any other payouts while at the same time giving huge tax concessions on equipment that are also protected from any other decisions, new laws or amendments in the future.
Trotman, meanwhile, said he would be recommending less ministerial powers in the proposed Petroleum Commission Bill.
The revised agreement provides for an increase in the annual rental fee from US$240,000 to US$1 million; training has increased from US$45,000 to US$300,000 and a new allocation of US$300,000 for social and environmental programmes as well as a 2% royalty.