Kaieteur News, ex-Senator Black and the oil contract rip-off

Feb 16, 2020 Editorial

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We were pleased to publish a letter received from retired Virginia State Senator, Richard H. Black, late last week. We thanked the ex-senator for his interest in developments in Guyana in general, and in the ExxonMobil oil contract terms and provisions, as those injure and insult Guyana (our position) specifically.
Though we find some aspects of Mr. Black’s letter condescending, we do owe him, the Guyanese public, and the rest of the watching and disturbed world, the courtesy of a little more than goes beyond our brief publisher’s note, which was attached below his letter published on Thursday last.
From the contents and thrusts of Mr. Black’s communication, it seems that he was particularly perturbed by our sharp and unalterable insistence that 10% (and not 2% ever) be the baseline going forward, would be the thing that respectful partners agree to between themselves, and which honourable negotiators find it within themselves to agree to and deliver.
From our perspective, everybody wins and emerges looking noble and principled. Guyana wins some due financial benefits, while ExxonMobil wins more than the regard and applause of Guyanese; it earns that rare commodity to which a price cannot be easily placed: it earns lasting goodwill. It is why we say this to the honourable, Mr. Black, in ringing words and tones: 10% today! 10% tomorrow! And then some more later!
As we persist with this, we do recognise and appreciate that the world of ferocious and ‘cut-throat’ competitive capitalism, with its unrelenting pressures and drives for increasing corporate profits do not work this way, in this magnanimous manner. But even as we understand and appreciate this, we say to Mr. Black, and before the whole wide world that we, at this paper, and on behalf of all of the poor, struggling citizens of this country, are fighting for our birthright, our fair share from what belongs to us, for what has been entrusted to us, through the bounties from above.
Please understand that, in our eyes and deepest of hearts, this is more than about money only, it is also about the prudent management of a sacred trust, and as Mr. Black should know full well, as the onetime state senator from Virginia that he was, sacred trusts are inviolate. On this, we are unequivocal and unambiguous; we are also unmoving in our determination to do way better than 2%, to be in a better place than the one in which this contract has placed us.
Further, we were taken aback by Mr. Black’s written position that “The proposal to demand a flat 10% royalty would be a disaster for Guyana. I am sure that Exxon would be delighted to take back the 50% working interest, with all of its associated costs, and just leave Guyana with a paltry 10% royalty.”
We are perplexed that Mr. Black, after all those decades of having “negotiated many exploration joint ventures” would believe and reposition our position and call for a 10% royalty to EXCLUDE the “50% working interest.” We are not that naïve, and we do believe that Mr. Black is not that naïve either, to think that we are so obtuse, as to plead, demand, and insist upon what he did term as “a flat 10% royalty” and that would be the total (the total in its absolute financial extent and reward) of our visions and interests.
We would regret what we are taking as a momentary lapse on the part of the good former senator, if this was deliberately intended to belittle. Because if it is so, then it amounts only to further insult to increasing injury.
As we asserted in our publisher’s note, our research of contracts across the oil globe has failed to reveal any other contract that comes anywhere near in comparison to that of Guyana’s in the scale of its lopsidedness, its completely unfavourable terms and conditions relative to what Guyana gets, and the burdens that it must bear for any future potential contingencies, such as environmental spills, legal fees, and taxes, among other severely agitating elements.
Clearly, something is wrong with all of this, and as we maintain the high road of temperateness and civility, we still must call this contract for what it really is at the core, notwithstanding the grand benefits that Mr. Black went to some pains to point out to us and all Guyana.
This contract is exemplary for its gouging character, in that it rips us off and, to use language with which Mr. Black should be most familiar: it make us-all Guyanese look like schmucks and dumb country hicks and patsies setup and made pansies of, through one deplorable extravagance and advantage after another in favour of Exxon’s interests.
We, here at this newspaper company, do not take kindly to any of this, and as we must, quietly register our dismay and disappointment in the verbiage settled upon by Mr. Black, where he deemed us to have “misunderstood” which is a polite way of saying that we lack the requisite understanding in this big, sophisticated world in which Exxon reigns like a colossus.
On the contrary, we understand the economics of dry wells and sunk costs, as well as we understand cost recovery, as the same applies anywhere and under any conditions. What we do not understand, and we find utterly objectionable, is this subtle insistence that we understand the contract with its 2% and other hidden overhangs that came to light, and that we accept it. That we cannot and will not do. It must be renegotiated.
We thank former senator Black for his efforts at attempting to reconcile the irreconcilable. Our parting words to him are these: most times, the indefensible cannot be defended. Nor the irrational rationalised. We say that the existing Exxon contract is characterised, in many aspects, with both, that is, the indefensible and the irrational. The struggle continues.

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