A sweetheart deal

Jan 24, 2018 Peeping Tom

The PNC knows how to make a sweetheart deal. It made such a deal with Omai Gold Mines Limited, handing that company a clause which protected it against any future laws. In other words, not even parliament could reduce the benefits which were due to Omai under that agreement.
Given the PNC’s record of controversial deals with foreign investors, it is not surprising to learn that ExxonMobil enjoys a stability clause within its agreement which protects the benefits which the company now enjoys under its agreement with the government of Guyana.
This newspaper reported yesterday on the generous concessions which are being enjoyed by Exxon. The oil giant enjoys uncapped concessions on items imported, including all-terrain vehicles, trailers, computers, other vehicles, bulldozers, cement, gravel, hammer wrenches, lights, drums, water tanks and waste bins.
Since some of the items on the list approved can be sourced in Guyana, questions have logically arisen about local content provisions within the contract.
Article 21 states that ExxonMobil and all its affiliates engaged in Petroleum Operations shall be permitted to import, free of duty, VAT on all or any other duties, taxes, levies or imposts, all equipment and supplies required for Petroleum Operations, including but not limited to drillships, platforms, vessels, geophysical tools, communications equipment, explosives, radioactive sources, vehicles, oilfield supplies, lubricants, consumable items (other than foodstuffs or alcoholic beverages or fuel).
Right now the Peeper and the publisher of this newspaper are sending out applications to Exxon Mobil. We would like to be employed by the company given the benefits which are to be paid and the concessions which are to be enjoyed.
The contract states that each expatriate employee of ExxonMobil or its affiliates who have been assigned to work in Guyana will be given duty free as well.
The contract states, “…Subject to the limitations and conditions set out in the Customs Act, to import into Guyana free of import duty and taxes within six (6) months on first arrival, his personal and household effects including one (1) motor vehicle, provided, however, that no property so imported by the employee shall be sold by him in Guyana except in accordance with Government regulations and upon the payment of the prescribed customs duties.”
It goes on to state that “any importation or replacement of motor vehicles by Expatriate Employees of the Contractor (including any Affiliated Company) and of Sub-Contractors shall be a matter for consultation with the Minister”.
The contract also states that each expatriate employee of the Contractor (including any Affiliated Company) and of Sub-Contractors shall have the right to export from Guyana, free of all duties and taxes, and at any time, all of the items imported.
As for the company of itself, the contract states that, “Any of the items imported into Guyana may, if no longer required for Petroleum Operations hereunder, be freely exported at any time by the importing party, without the payment of any export duty or impost; provided, however, that on the sale or transfer by the importer of any such item to any person in Guyana (other than the Government) import duty shall be payable by the importer on the value thereof at the date of such sale or transfer as determined by the Customs and Excise Department in accordance with their applicable rules.”
What is most attractive, though, is that the contract allows Exxon to determine how much it will pay its workers. The Peeper and the publisher are applying for a job because it matters not what Exxon pays us, the money is going to be recoverable by the company when oil production begins. In other words, Exxon can pay its workers whatever it wants and simply deduct it as expenses which have to be repaid by Guyanese.
This is the sort of sweetheart deal which was signed by the government with the oil giant. It is a shameful agreement. Given all the concessions which are enjoyed by Exxon, it needs to be asked just what benefits Guyana will enjoy under this most generous contract that the coalition government has signed with the oil company.
The President is trying too hard to keep his coalition government together. It is not worth keeping it together. The agreement signed with ExxonMobil is as rotten as one can get. It is time for a Commission of Inquiry to be launched into this deal which will see Guyana’s oil wealth being squirreled away by the oil multinational.

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A sweetheart deal

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