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Contract with ExxonMobil… Int’l bodies to help Guyana close loopholes

Dec 30, 2017 News

The International Monetary Fund (IMF) has found a number of loopholes for abuse in Guyana’s Production Sharing Agreement (PSA) with ExxonMobil.

But the government believes that there is no need for alarm or worry as several international bodies, the IMF included, are lending tremendous support to help Guyana remove every possible chance for exploitation by the operator.

This was noted yesterday during a press conference co-hosted by Minister of Natural Resources, Raphael Trotman. He was at the time responding to a question on the disturbing findings of the IMF.

One issue the IMF points out in a report is in relation to ring-fencing. This provision ensures that ExxonMobil cannot transfer the expenses incurred at one well to another.

The IMF said that in principle, the ring-fencing arrangement ensures that the government’s revenue from the Stabroek Block is calculated based on each field or well separately.

The Fund stated, “However, this is undone by the Production Sharing Agreement framework, allowing the contractor to allocate cost oil to any field within the contract area.”

To the aforementioned, Trotman said that on November 30, he and the Finance Minister, Winston Jordan, sat with IMF representatives and those issues were ironed out.

Trotman said, “We went through them with the Guyana Revenue Authority and others. The answer is that we are working. IMF, World Bank, the Caribbean Development Bank (CDB) and the Inter-American Development Bank are giving us tremendous support.

“We are building capacity on a daily basis and hiring capacity and ensuring that we cover all that we are supposed to…”

The Minister said that with the help of those international agencies, Guyana will be in a position to tighten all loopholes.

He added, “We invited the IMF to tell us what we are lacking in this regard, so Guyana is not alone in this.”

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