Govt. made the PSA as elusive as the Black Gold

Dec 08, 2017 Letters

DEAR EDITOR,
When it was announced by Exxon Mobil that oil was found days before the 2015 general election in the Stabroek Block in commercial quantities, the public was ecstatic and optimistic. Anticipation and expectations were high. Mirages of oil wealth were blooming on the horizon. Gradually, the “reality checks” began to set in like rigor mortis on the Guyanese psyche.
The Media – particularly Kaieteur News – played its part by enlightening the public on instances where oil was found by the said Exxon Mobil in various countries and it did not change the life of their citizens. It also informed the public of the “tact and guile” of Exxon in its operation around the world.
Highlighted, too, were ways in which corrupt governments – a phenomenon that had been our “Achilles heel” since independence – had seemingly conspired or innocently signed bad or unfruitful Production Sharing Agreements (PSAs) with the oil giant (Exxon Mobil).
As time went by, it was revealed that the former Government (PPP) had installed a “secrecy clause” in an exploration and production agreement signed by Exxon and the then Government of Guyana, before Exxon’s quest for oil. The Coalition Government used that secrecy clause as a pretext for not releasing the contents of the oil deal (PSA) it signed with Exxon.
It defies the logical mind when the President seemed to consider trampling on the constitution, the ultimate law of the Land, by impeding on the rights of independent constitutional commissions and making a unilateral appointment for Gecom chair as a trivial matter, while the asinine secrecy clause in the exploration and production agreement was revered and adhered to.
Now that the Government agrees to release the contract before Christmas, the public awaits with patient expectation. The Environmental Impact Agreement, which Exxon had to sign to proceed to production, was released earlier this year. Judging from that document, it seemed that Exxon wrote the document and gave the Government to sign, while it should have been the other way.
The document does not hold Exxon liable to stand the cost of damages to the environment in the event of an “oil spill” during the course of production. This is not the norm on the international oil production scene. Straight off the bat! A major oil spill in the waters of the Caribbean can cause us more than our share of the estimated 2.8 billion barrels in compensation, while Exxon walks free. The agreement certainly does not demand that Exxon adhere to the highest safety standard in its production.
The Government readily admits that they are inexperienced – not only in oil and gas but in general governance. I wonder who was present when they signed that piece of crap? I think we rely too much on experts. We should learn to trust our instincts. If they meant it, when they say the oil belongs to the people of Guyana – to them I say “nothing beats the eyes of the master”(owner). We should have been consulted every step of the way.
So far, what is touted is a 2% royalty and a 50-50 after Exxon deducts its cost. This might be asking too much. This might induce Exxon to inflate its cost to garner more of the pie. It is believed that we are heading for a “Singapore syndrome” where we would not be able to verify Exxon costs.
I must commend the Media for a great job – educating the masses of the wiles of Exxon Mobil and what took place around the globe in the field of Gas and Oil. Had there been wide consultation, I am certain we would have had a realistic PSA. I would have liked to see 2% royalty, 58% Exxon 40% people of Guyana – with Exxon bearing its cost of production.
In that scenario, we would only have to measure the oil that comes out of the ground. Greed should not allow us to be like the dog that dropped its bone for a mirrored reflection of a larger one.
Rudolph Singh

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