Guyana presents ExxonMobil with a gem of an opportunity to erase its negative image

Feb 04, 2018 Letters

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Dear Editor,

I have been most excited at the discovery of petroleum products in Guyana and welcome the involvement of ExxonMobil in this venture.
ExxonMobil is positioned to make massive profits from this lucrative venture and all the international partners affiliated with ExxonMobil, including Hess Petroleum, have extolled the financial prospects of this project.
However, I also believe that ExxonMobil, a world renowned business conglomerate, has had a lot of negatives heaped on it by various countries where they have operated.
While they have made great contributions to nations, business corporations, individuals, universities, etc. and have definitely made a significant and positive impact in the world, they, like individuals or personalities of high calibre, may not always get the credit they deserve.
Guyana presents ExxonMobil with a gem of an opportunity to erase the negative image plastered upon them. This is like virgin territory. They can show the people of the world how they can make a nation shine on many fronts.
This is my appeal to you, ExxonMobil, make Guyana your shining example of the good that you can do. I am always available if anyone wishes to communicate with me on my views here or any other that pertains to oil production, business and commerce.
Let me say that it appears that Guyana, like many countries that got into trouble, failed to realise the importance of scrutiny and due diligence.
Just consider, for a moment, the troubling and ludicrous agreement that Guyana signed with ExxonMobil.
For instance, ExxonMobil can be sued for a variety of reasons: an employee can sue for being hurt on the job; someone can sue for an accident on an ExxonMobil site; there can be lawsuits in the event of oil spills. In any one of these scenarios, tens of millions or billions of US dollars must be paid out in compensation. And guess who will have to foot the bill? Poor little backward, third-going-on-to-fourth-world Guyana; of course, even though, we have nothing to do with the day-to-day operations of ExxonMobil. The burden of the fines, payment of the lawsuits and legal fees for top ranking lawyers, falls squarely on our weak back.
Like many others, I also think the two percent royalty for mineral rights is absurd, given the high production level and sales volume projected by the company. Furthermore, it does not make any economic sense to exempt ExxonMobil from changes to our tax regime and our financial laws.
It is easy for people to blame ExxonMobil. I say no; it is not their fault. ExxonMobil is a business entity and they can be expected to negotiate a deal that puts their interests first. It is simply good business sense for them to use all their bargaining power to ensure that the interests of their shareholders and directors come first and their opportunities for expansion and investment are protected.
Likewise, in recognition of the fact that ExxonMobil is a powerful force with solid experience in its line of business as well as knowledge and capacity, our government and negotiators should have done due diligence and used all the influence at their disposal to maximise the benefits for Guyana.
However, we never sought to consult our brilliant Guyanese about the deal. The ordinary man and others like Christopher Ram, our Vice Chancellor and Pro-Chancellor of the University of Guyana, our former Chancellor of the Judiciary, our former Chief Justice, Senior Counsel K.Juman Yassin, or even an ordinary, simple businessman like me and others can pick up the tricky bits in the fine print and bring them to the fore for discussion.
Government loves to hire foreign specialists to serve as consultants, but their performance in finalising important arrangements is sometimes highly suspect. A quick example is the construction of the East Bank overpass for which we had to engage a Trinidadian consultant and contractor, which made us look so puerile, petty and incompetent.
It appears to me that the Minister responsible for Natural Resources, Honourable Raphael Trotman, the Cabinet and Government as a whole did not scrutinise the ExxonMobil agreement properly. Perhaps they just signed out of desperation to secure what appeared to be a good opportunity.
ExxonMobil cannot to be blamed for that; it is the ‘Powers of the Day’ who are responsible. They should have brilliantly involved the Opposition, especially persons with the experience and institutional knowledge as a former finance minister and president of Guyana Bharrat Jagdeo.
They should have involved the Private Sector Commission! The Private Sector Commission is known to have brains within its system. They should have involved the Georgetown Chamber of Commerce!
I am not in any way extolling the People’s Progressive Party (PPP) and Bharrat Jagdeo for anything else because I know they also made major blunders in their administration. I am referring exclusively here to the negotiation of the ExxonMobil contract.
Recently, Honourable Raphael Trotman said that he is not “advised” that Government intends to revisit the agreement. Not revisiting the agreement is a dangerous thing and Guyana may definitely feel the wrath of the ‘Dutch Disease’.
I do believe there will be money circulating as a result of the extraction of our oil and natural gas resources. Some people will enjoy a higher standard of living, better quality of schools and education, better welfare services for the nation. But the fact remains that we are liable and culpable for making a bad deal and it may one day cause us to lose our teeth even in the event of major oil spills and lawsuits in the Caribbean against ExxonMobil.
I reiterate that I do not blame ExxonMobil. I blame the Guyanese signatories and the administrators responsible for signing away the rights and wealth of our people.
Therefore, Government has a responsibility to conduct diligent studies again and insist on a reasonable contract that will be more beneficial to our peoples and our nation. This time, we should go to the table armed with more knowledge and be better prepared. We should consult our local brilliant minds and try to fix this mess.
We must demand that the contract be reviewed and see how we can get, if necessary, a temporary suspension. We may not be as powerful as ExxonMobil, but we must show that we have b….s
This time, we must not let them take advantage of our poverty, eagerness, lack of knowledge, lack of groundwork, negotiation skills and preparation. We can even draw on Production Sharing Agreements (PSAs) signed in other parts of the world and get the input of experts on these matters.
I have serious reservations about Guyana bearing the cost of lawsuits and any fines that might be implemented for anything. The entire exploration and business might not even be worth it. We were doing quite well surviving without all of this.
Once again, I wish to remind the current government, which in its own way is trying to do the best it can, and the previous government, that no ‘government of the day’ owns the country.
Haji Roshan Khan

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