PRAISING EXXONMOBIL, BUT FOR WHAT?

Mar 25, 2018 Editorial, Features / Columnists

Guest Editorial
It is clear that the oil contract signed by the government with Exxon-Mobil in 2016 would benefit the company more than the government. Therefore, it is pathetic for senior government officials to applaud the contract and praise ExxonMobil. It seems that the government is bent on making silly and costly mistakes.
It has misled the nation on the contract and disparaged those who have highlighted some of the glaring flaws in the contract. In terms of negotiations, the government was no match for ExxonMobil.
ExxonMobil was brazen to state that any attempt by the government to renegotiate the contract would make Guyana look terrible; that it would also turn away investors because the world would see that the country is not a stable place to do business.
Had the government done proper due diligence on ExxonMobil similar to the way employers would normally do on prospective employees, it would have known that ExxonMobil has a poor track record in its business ventures with other countries.
The government has said that there will be no review of this contract at this time. But a review is needed. ExxonMobil is aware that the contract is lopsided so it took great pains to seek out a review company, Wood Mackenzie, to report on its perspective of the Guyana contract. The fact that Wood Mackenzie found that the contract was neither the best nor the worst does not say that it is a good contract.
Indeed, that finding should prod ExxonMobil to review the contract and do better with Guyana. The fact that at this time it appears to be a buffer between Guyana and threatening Venezuela may be something worth considering but it is not worth the amount of money it is costing Guyana.
This is a very important matter for the people. Instead of appreciating those who exposed the flaws in the contract, some members of the Cabinet have deemed them as mindless jokers, unpatriotic citizens and mere oppositionists with an unrealistic world view.
Their attitude is typical of those in the previous PPP administration who were too obsessed with power and too arrogant to accept responsibility.
The fact that they are convinced that the contract is good for the country and that the nation should be appreciative of ExxonMobil is offensive. It suggests that they are more knowledgeable than the international oil experts who have stated that the oil contract is among the worst ever negotiated anywhere between a multinational corporation and a sovereign nation.
A report from International Monetary Fund (IMF) states that the oil contract with ExxonMobil is very generous to the company with several loopholes which would significantly reduce the benefits to Guyana. The IMF noted that there are no provisions in the contract to adequately address the recovery costs by ExxonMobil as well as provisions to guard against an oil spill or expenses from an unsuccessful exploration.
Instead of acknowledging that they have made some major blunders and take responsibility for their actions, several government ministers continue to praise ExxonMobil, which has saddled Guyana with a pre-contract bill of US$460 million and the cost for a feasibility study to determine if the country has large quantity of non-associated or “dry” gas.
If ever there is an ideal time for a government to seek a review of the contract it is now. ExxonMobil is not averse to listening. Indeed the contract comes up for review in another four years but such is the clause that ExxonMobil could refuse and Guyana could do precious little in the face of that opposition.

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