Show us the ExxonMobil deal

Aug 13, 2017 Features / Columnists, My Column

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Guyana is on the cusp of becoming an oil-producing nation. About three years ago ExxonMobil announced that it had made a significant discovery offshore Guyana. I remember when then President Donald Ramotar reported to the nation that Guyana was ready to move ahead.
Indeed, Guyana is now rated a middle income country, but if you are to talk to any Guyanese you would hear them deny that Guyana is a poor country. It does not have the skilled people necessary to take advantage of the jobs that are going to be opened up.
Some have already gained low-level jobs with the oil company and the University of Guyana is now preparing to train engineers for the oil sector. Last week ExxonMobil announced that it was taking about a dozen Guyanese to train them in the United States.
But while all this is happening, the people are not really sure what the future of oil holds for them. They heard that the previous administration had signed an agreement that secured a one per cent royalty. The details of this agreement were never made known, but from what happened later when the current administration renegotiated the contract, it was able to get a slightly better royalty rate. The government also announced that it has secured fifty per cent of the proceeds after expenses.
There was no further release of the contract. The nation had been reading about the exploits of ExxonMobil around the world. There was talk that the oil company left some countries in no better condition than when it began to extract oil.
The reason cited was corrupt officials who simply reached out to the oil company for their personal aggrandizement. But if there was enough from the oil, then it would be difficult to see the leaders pocketing so much money.
Guyana is on the world stage as one of the most corrupt nations, so the rest of the world does not really expect to see Guyana develop. But this time around the current administration is seen as less corrupt, so one would expect the nation to enjoy the benefits from the oil discovery.
Yet the way things are, it is as if the people are not important to whatever is being discussed between the government and the oil company.
I remember talking to Opposition Leader Bharrat Jagdeo about the coming of ExxonMobil. He told me that there was some skepticism on the part of ExxonMobil about investing US$150 million in the search for oil. It was then that I realized that technology can play an important part in any development.
There were many oil explorers, but nine had the capability of going as deep as ExxonMobil. The fact is that where they said that no oil existed, ExxonMobil showed that there were millions of barrels. Given the technology, Guyana could have been an oil-producing nation decades ago, and one can only dream about what might have been.
Is Mr. Jagdeo taking some credit for the oil find? Perhaps. But he never released the contract that he signed. The new government promised to be transparent, but all of a sudden it is saying that it cannot disclose the oil contract at this time. And as fate would have it, former Attorney General Anil Nandlall is insisting that it could. What the government could not do in the past is still a secret.
I never understood confidentiality clauses. I could understand if there are going to be challengers for the right to explore and produce the oil and gas. But with the agreement in place, I cannot see that happening unless Guyana wants to be blacklisted.
The good thing is that the nation is not sitting back and allowing the secrecy to go unchallenged. It has also challenged ExxonMobil to talk with us, a challenge that is still to be accepted. I cannot understand why the oil company cannot say what it is doing. After all, we are a bit of insignificant people in a corner of the world that many people have never heard of. At least that is what ExxonMobil once thought, until the reality slapped it in the face.
We may not know anything about marketing oil, but we know what a fair share is in any partnership. We have heard that Guyana will get fifty per cent of any oil that comes to the surface after expenses, but we do not know what the expenses are. Is ExxonMobil opening its books to the government? And if so, do our auditors have the knowledge to read and understand what is presented to them?
It would be nice if the government could explain to us whether it is being kept abreast of the expenses being created by ExxonMobil. These are things that could be checked, since oil production is nothing new.
There was a time when foreign companies came to Guyana, got tax concessions beyond the imagination, and left little behind for the Guyanese. Omai Gold Mines extracted tonnes of gold. I remember the late President Cheddi Jagan checking the contract and finding that he could not have got better had he done the negotiating.
The royalty from gold was not bad, but to this day, I believe Guyana gave more than it got. In the end Omai bailed out, but others came in, and working in close proximity to the Omai mines, are doing great. The returns may not be great, but the government is not complaining.
We have not heard anything about concessions for ExxonMobil. Are the concessions hidden in the agreement? We do know that concessions can be elaborate. BaiShanLin got so many concessions that at one time it wanted to import paint that could have painted every house in Guyana, and enough cement to construct hundreds of homes. Fortunately, the government changed, so these concessions were not granted and BaiShanLin soon packed up.
We need to see the contract so that we could indicate whether we are happy. One official once said that Guyana needs ExxonMobil rather than the other way around. That may be the case but then again, we are familiar with our poverty. While we would like to creep out, we are not prepared to prostrate ourselves.

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