Opposition willing to support a govt-sponsored motion for renegotiating ExxonMobil contract

Last Updated on Thursday, 15 February 2018, 16:48 by Denis Chabrol

Opposition Leader, Bharrat Jagdeo says if government sponsors a parliamentary motion for the renegotiation of the Production Sharing Agreement (PSA), his People’s Progressive Party Civic (PPPC) will support such a proposal.

“If the government comes with a motion of that nature, once the motion is in defence of Guyanese…ExxonMobil has to do what’s best for its shareholders and anything that I see that will bring greater benefits to my country, my people then we will support it; that’s a generic position,” he said when asked whether he was willing to support or table a motion in the National Assembly to support the renegotiation of aspects of the contract that he is concerned about.

President David Granger on Wednesday said the contract was back with Cabinet, but he ruled out opening fresh negotiations with the United States (US) oil giant and its partners who form part of the Esso Exploration and Production (Guyana) Limited. “These matters are before Cabinet and it depends on what determination Cabinet arrives at but the Contract is an agreement between two parties and these things that have to be approached very carefully. There is no prospect at the present time that it is the intention of Cabinet to review it, but as I said it is before Cabinet,” Granger has said.

Noting that the PPPC was elected to support Guyanese,  he added that, “any motion, any public position that supports the interest of Guyanese people- I made that clear- that will see them get wealthier, better off, etc in the long run using oil resources or any other resources, you can count on the PPP’s support for that.”

He, however, ruled out the PPPC initiating such a motion, fearing that his party would be branded as creating an uncertain investment climate. “I don’t want to say ‘we’ because next thing you are going to hear is that ‘we are killing investors’,” he said.

Asked whether, based on his experience as a former President, that such an agreement could be renegotiated, Jagdeo said it is better for contracting parties to agree to re-open an agreement instead of one party because that could lead to a dispute. “Anything that any sovereign government negotiates with a second party, with another party, could be renegotiated if the other party agrees to come to the table, it could be done amicably…If you pursue it and the other party does not agree with it, then you end up in a dispute,” he said.

Jagdeo made it clear that he supports an amicable approach.

Among the concerns about the contract are the two percent royalty that is widely regarded as low by world standards, the US$18 million signing bonus, prohibition on increases in taxes and duties even if local laws are changed, and the prevention of unannounced visits to the ExxonMobil offshore operation.

Minister of Natural Resources, Raphael Trotman has defended the contract, saying that the company and government had to consider the several political, Guyana-Venezuela border security and financial risks.

Jagdeo recalled that back in the 1990s, the PPP had been concerned about investor contracts between the then People’s National Congress (PNC)-led administration and Omai Gold Mines, and Barama Company. However, on coming to power in 1992, he said the PPPC did not renegotiate those deals “because we were very worried about the signal that it sends to the country”.