Given mistakes made with ExxonMobil Contract…Guyana should not enter into one-on-one negotiations with other oil companies

Jun 17, 2018 ExxonMobil, News

– Former Pres. Advisor warns

Former Presidential Advisor on Petroleum, Dr. Jan Mangal, is of the firm belief that Guyana’s authorities should not award a single oil block via one-on-one negotiations with any other oil company.
In a statement to the media yesterday, Dr. Mangal emphasized that “one-on-one negotiations” are prone to corruption and Guyana is a highly corrupt place.
The Oil and Gas Consultant said, “Chevron, Petrobras, etc. would love for Guyana to enter into one-on-one negotiations because they know they can outwit Guyana at the negotiating table, or even worse, the same way Exxon outwitted Guyana in 2016.”

Former Presidential Advisor on Petroleum, Dr. Jan Mangal

Dr. Mangal said, too, that Guyana should not award any acreage until there is sufficient capacity in the new Department of Energy for creating and managing a transparent, competitive auction process.
He added that the new department needs to be staffed with qualified and experienced Oil and Gas professionals who possess decades of experience with major oil companies. He said that they must also have a clean and ethical background.
The Oil and Gas Consultant also stated that the “geopolitical” (Venezuela) excuse that has been used by some to justify one-on-one negotiations is not valid. In this regard, Dr. Mangal said that the same excuse was used by many in Government to justify not releasing the ExxonMobil contract for the Stabroek Block.
Dr. Mangal said, “Luckily for the people of Guyana, someone at the highest level of government understood the importance of transparency and released the contract in December 2017. The oil companies and their stooges in government will always prefer secrecy over transparency, but transparency is the most important ingredient to ensure the oil industry benefits the poor people of Guyana. If there is secrecy, then the only ones who will benefit will be the oil companies, the local business elites, and government officials.”
“If you think I am being critical of the current administration, it is relative. Guyana would be in a much worse place if the previous administration were in charge. There would be zero transparency; blocks would be awarded in complete secrecy, et cetera. But please remember greed and corruption do not respect elections.
“These forces are still strong and tempting under any administration hence the need for heightened scrutiny by the people of Guyana and their watchdogs.”
The Consultant added, “If you think I am being critical of the oil companies and the industry, no I am not. I believe this new industry can be tremendously transformative for the poor people of Guyana if handled well.”
Dr. Mangal said that the only way this new industry will be successful and sustainable in a way that benefits the poor people of Guyana, is for the authorities to negotiate hard, for them to be prepared to walk away from a particular negotiating table, and for Guyana to hire the best and the most ethical individuals.
He cautioned that if the authorities do not get a fair deal, and also prove that Guyanese can manage the revenues well, it will backfire.
Dr. Mangal said that already, Guyanese are seeing many negative signs. He pointed out that the cost of living is increasing but the salaries of the majority are unlikely to be.
The former Presidential advisor said that this is unacceptable especially since there are so many lessons from around the world on how to manage oil and gas well, and on how not to.