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OPINION: ExxonMobil contract, from the horse’s mouth: Guyana held to ransom

by GHK Lall

The Hon. Minister of Natural Resources, Mr. Raphael Trotman, MP, has now spoken a little more about what could have—perhaps, should have—been negotiated, finalized, and executed at the time with the now standing, sacrosanct ExxonMobil contract, and all of its troubling terms. Mr. Trotman is on the money on a few things about that contract, but I must humbly disagree with him on a couple of others.

Before proceeding to take the liberty of sharing my thoughts, repeated again for my brother and sister citizens, though snippets of this would have formed part of a few exchanges that I had with the Honorable Minister, I do not think that I breach any confidence nor is there any violation of our relationship. For starters, Minister Trotman is absolutely correct as quoted about “context” and the local military capabilities and realities. Those are elaborated upon and made more stark by me, through emphasis on what is present in Venezuela, which is that of a near 30 million strong population, a verifiable Air Force with F-16s, and a navy of no small significance relative to Guyana. In terms of those F-16s, all it takes is one plane, one flight, and one bomb (literally) to blow that seawall of ours apart and a third, if not close to half the population of Guyanese, would be up to their necks in saltwater. In terms of manpower and arsenals, Guyana is a nonstarter. Period. The downstream effects should be imaginable for a society struggling with basic amenities and daily existence. Thus, I bond with the minister that a big brother was/is needed. Well, we have the biggest one now; and one that has its own axes to grind.

As I have said time and again, a China or an India, even the UK or France, who are not oil powers only, but also established military and economic powers would pack up and retreat in the heat of any border contentions and military confrontation. They are too far away; the dog in the fight would not be defendable at home; the costs versus benefits not worthwhile.

Thus, I agree with Mr. Trotman on the terms of the ExxonMobil contract ransomed (and it was that), that the government should have done better. But my first disagreement is this: could it have done so? Could any Guyanese government have been able to do, in view of the same immovable contexts referred to by the Hon. Minister, and now pounded again by me? Venezuela is not going away. Not agreeably nor gently into anywhere.

I do not think so. To repeat another public assertion of mine and to add sinew to my position, it is known—or should be—that ExxonMobil does not renegotiate contracts. Yes, they are that sacred and for one simple reason: a business and financial and strategic one. I would go so far as to say it is a principled one, from the perspective of ExxonMobil. The reason, according to ExxonMobil’s thinking, boils down to this: if the corporation were to renegotiate and improve its contract terms with Guyana, then it opens itself for approaches and pressures from every other entity and nation with which it does business under the umbrella of binding oil contracts. Leaving aside the consideration of inviolability of its contracts, the concern is this: where does it stop? Where would clamors for renegotiation and a new and better deal end? These are mindsets written in stone in ExxonMobil’s successive brain trusts and its very DNA. If the company were to do so, then it has to be so on its own terms and in its own time. It did so when muscled by one Hugo Chavez. And look how much oil they had.

I think that Mr. Trotman knows this, and all too well. The government, his government, my government, had no choice. That is to the regret of all of us, but the tightness of the ropes on its hands were remorseless; that led to the kind of weight that brings succumbing to the ruthlessness of corporate America, and none more so than its oil giants. I should know, as I have been in that milieu.

I will give Minister Trotman the advantage of the truth on the government allowing the narrative to be hijacked. On this one, the government has only itself to blame though, reality be faced, no level of official messaging could have conquered the marketing, propagandizing and sometimes well-meaning forces and voices raised in opposition to the contract. I chalk all of this up to a combination of calculation, arrogance, innocence, naiveté, and resources on the part of both government and its critics.

Having said so, I think also that this was due less to the limitations of the PR people, and more traceable to the deafness and stiffness and unreadiness of the government itself to be flexible and humble and a bit more open in its oil story. In some ways it was constrained by circumstances, as I believe that the Venezuelan elephant would have been attacked and hounded out of town by disbelieving, patriotic critics. Those would be the honest ones. There would have been no listening. No willingness at understanding and appreciating. Once again, I can attest to that reception.

For its part, Venezuela has stated where it stands with all this business about courts and international opinion and pressure, should matters go against it. I think it will never let go. Not in my lifetime nor in those to follow. And with such a national passion intact and continuously surging, that alone is worth five percentage points less on the Guyana side of the contract bargain. ExxonMobil knew it. This government knew it. The PPP government knew it. I know it. And so should the rest of well-intentioned Guyana.

We were not robbed. We did not give away anything. We just could not do better. End of story.

Mr. GHK Lall is a Guyanese author, columnist and former financial analyst on Wall Street.