2016 deal an example of astute statecraft

Feb 08, 2020 Letters

DEAR EDITOR,

May I suggest that the serious flaw in the Global Witness report is its failure to understand the external political context at the time of the signing of the 2016 Agreement with Exxon.
If one recalls, in 2015, Venezuela had staked out most of Guyana’s Exclusive Economic Zone for itself. Stabroek News reported on June 7 2015: “Venezuela makes new claim to Guyana’s territorial waters, potential oil block…” On May 27 Maduro issued a decree creating the “Atlantic coast of Venezuela,” which now includes sovereignty over Guyana’s territorial waters in the Atlantic Ocean off the Essequibo region. The preposterous borders effectively made Guyana landlocked.
So the decision a year later to move expeditiously towards a revised production sharing agreement with the consortium was based not only on immediate needs, but also long term considerations of securing the country’s Exclusive Economic Zone. Our Patrimony.
How to do that? By having Exxon and Hess continue as operators, it meant two large US companies with undoubted influence on US foreign policy would have interests allied to ours.
As such a small country, Guyana managed to bring a level of protection for its resources it could never have had with its limited military defences to repel an aggressor. Furthermore, the US$18M signing bonus afforded Guyana the ability to bring a case before the International Court of Justice that will consider its jurisdiction within a few weeks and, one hopes, resolve this issue once and for all.
The oil companies got something, but we got something too. This decision will be seen in years to come as an example of astute and visionary statecraft. Even in the interim one can argue that this has worked out well for all parties involved. We don’t need to consider what might have been and indeed the alternatives to the present day reality might have been much worse, including armed confrontation over oil fields with our neighbour; a force majeure and freeze on industry activity.
As of today, oil now flows into the Liza Destiny – 1M barrels every ten days – earning Guyana substantial revenues – a minimum of 14.5% of every barrel pumped; Exxon and its partners are moving ahead to fast forward two more FPSOs that will help to bring US$10 billion in annual revenues to Guyana by 2030; ’a robust economy creating good jobs for the people. And perhaps most important of all, our western border is quiet tonight. Indeed one could reasonably claim our EEZ has never been so secure.
Believe it or not, the Cooperative Republic of Guyana is winning right now, and will for decades to come.
Yours sincerely
Albert Russell

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