Nation Wants Inquiry into Oil Contracts

Feb 25, 2020 Letters

DEAR EDITOR,

An ongoing tracking opinion poll being conducted by the North American Caribbean Teachers Association (NACTA) has found that the nation wants an inquiry into oil contracts signed by the government with Exxon and other energy giants. There are various reports making reference to the one sidedness of oil contracts, improper action in the signing of the agreement, and on Exxon’s acquisition of oil blocks. Voters say they are not pleased with how the agreements were negotiated and signed as revealed from various media reports. They say the oil negotiations and contract is scandalous. It is noted that Guyana’s oil and gas reserves have the potential to transform the poor country with extraction volumes expected at over a million barrel oil a day in a few years. Respondents in the poll are calling for a thorough investigation on the contract negotiation and its signing. And they also want the contract to be made public including the removal of any confidentiality clause. The media is praised for exposing alleged wrong doing in the contract.
The latest poll is also querying voters for their views on support for the political parties, confidence in the organization of elections, and approval ratings of GECOM Chair and other public officials.
The poll is being supervised by Dr. Vishnu Bisram who has been conducting opinion surveys in Guyana for over three decades. The ongoing survey represents the general demographics of the population.
Based on the findings of the poll, virtually no one is pleased with the contracts signed with Exxon and the oil companies. People feel ‘something is amiss’ about the negotiation with Exxon; in short, they feel there was corruption. People want a full disclosure of the contracts between the lessor (owner or the people of Guyana) and lessee (tenant – Exxon or other energy company). They want an inquiry into the oil contract — a full investigation into the facts. Earlier polls found that almost everyone feels the oil contracts need to be revisited and re-negotiated.
The contract signed with Exxon offers Guyana 2% royalty after expenses are deducted, 12.5% profit (after all expenses deducted, including 75% pre-costs operation), and in return Guyana government pays all of Exxon’s taxes. Guyana got a bonus of $18 million obtained in secrecy. The Exxon contract has been kept in secret because of a confidentiality clause signed by both sides.
The standard royalty amount given to countries is 12% before deduction of expenses, signing bonus in the hundreds of millions or billions of dollars, and profit sharing in favour of the owner (60-40%), and the companies pay their own taxes on the profits. Virtually none of these conditions were adhered to in contract with Exxon.
In the current poll, asked if they think there was a corrupt transaction in negotiations with Exxon and other oil companies, 87% said yes, 2% said no and 11% said not sure or not familiar with the issue.
Asked if they think there should be a commission of inquiry into the negotiations and signing of the contracts with Exxon and other oil companies, 91% said yes, zero in the negative, and 9% not sure.
The nation feels government or politicians should not dismiss the varied news reports and commentaries into how Guyana has been ‘cheated’ out of tens of billions of American dollars. The reports have cast a shadow over Guyana’s energy plans long before the first oil started flowing a month ago. Voters say government must end its secrecy regarding the oil arrangement and bring the deal signed with energy companies in the open. They want the Exxon contract to be investigated.

Dr. Vishnu Bisram

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