Govt. reviews 17-year-old contract with Exxon Mobil …but agrees it provides “relative” protection as constituted

Jun 29, 2016 News

Pull quote: “I think that the agreement signed in 1999 perhaps represented the best that Guyana could have gotten at the time.”
By Abena Rockcliffe-Campbell
The APNU+AFC government is claiming to be serious about protecting the interests of Guyana and its people. Well at least that is what is being touted by the Ministry of Natural Resources, according to the subject minister, Raphael Trotman.
During a recent interview with Kaieteur News, Trotman disclosed that the contact that is currently governing Exxon Mobil’s exploration of oil is one that has been signed since 1999 – 17 years ago. That would have been during the reign of the People’s Progressive Party/ Civic (PPP/C) government.
Trotman said, “It’s a pretty old agreement, but it remains enforced because we respect the sanctity of above board agreements. However, government has taken the opportunity to have the agreement reviewed if not wholly, certain parts.”
He said that this is being done to secure a stronger relationship with the American company “because we are very interested in an even stronger relationship with Exxon.”
The Natural Resources Minister also told Kaieteur News that it is imperative that the contract be updated to conform with standards of today, as having been signed in 1999, Trotman said that the contact can be considered outdated in some areas.
He explained that there are some industry practices which would have evolved over the years”…so we remain engaged with the company. As I said, the relationship is a good one, but we are working on improving that relationship and improving the terms of the contract in the areas we feel need strengthening.”
Trotman was asked if he feels the contract provides adequate protection for Guyana as a young nation about to enter into the oil business. He replied, “It is relative. I think that the agreement signed in 1999 perhaps represented the best that Guyana could have gotten at the time. The agreement itself is not a bad one, but with the passage of time… from 1999 to 2016, we believe that there are some areas that can be strengthened; and we are working with the company to do so.”
The Minister continued, “I wouldn’t describe it (the contract) as against our interest, but it is dated in some respects and we want to ensure that we have a more modern and realistic agreement.
Trotman sought to make it clear that Exxon has not in any way attempted to resist a contract revision. Therefore, he thinks that the process would be a smooth one.
Exxon Mobil is the only company that has so far found oil in commercial quantities in Guyana. The first find was made last year.
And Trotman said that more tests have been carried out over the last few weeks “and I hope to get a report soon on those tests.” The Minister said that he couldn’t speak any further until the report has been received. The report will indicate quantity.
Last year Exxon made an oil discovery in the Stabroek Block, located around 120 miles offshore Guyana.

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