Stabroek Block agreement… Govt. negotiators let Guyana down

Stabroek Block agreement… Govt. negotiators let Guyana down – GCCI President

Feb 25, 2020 News

By Kemol King

Those who negotiated the terms of the Stabroek license on the Government’s side let Guyana down.

Businessman, Nicholas Deygoo-Boyer

That is the view of National Hardware owner and President of the Georgetown Chamber of Commerce and Industry (GCCI), Nicholas Deygoo-Boyer.
He made this known during a recent edition of the Kaieteur Radio show ‘Petroleum 101’, where the discussion was focused on Guyana’s final local content policy and Guyana’s history with foreign companies.
Commenting on the lopsided deal, Deygoo-Boyer said that he thinks Government could have negotiated a better set of fiscal terms.
“If I was in the position, knowing that I had no experience in terms negotiating a contract, I would have hired international negotiators.”
It was revealed that by Global Witness in a report titled ‘Signed Away’ that Minister of Natural Resources, Raphael Trotman, hurried through the negotiations which lasted a course of one month. It was also revealed that he neglected to heed expert advice multiple times.
Because of the negotiations led by Trotman, Guyana is left with a contract that gives it a low share by industry standards, according to the internationally respected anti-corruption advocate.

The 6.6 million-acre Stabroek Block, offshore Guyana

Kaieteur News’ coverage over the years has comprehensively demonstrated how many of the fiscal terms are either unfair to Guyana, meagre by industry standards, or both.
The companies with interests in the Stabroek Block are ExxonMobil subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) who is the operator with a 45 percent working interest; Hess affiliate, Hess Guyana Exploration Limited (30 percent); and Chinese contractor, CNOOC Petroleum Guyana (25 percent).
When it comes to renegotiation, the National Hardware owner has some advice for Government. He said that he has had to, in representation of his business, negotiate with businesses much larger than his. In all of those, he said that he has had to arm himself with data.
Deygoo-Boyer would not advise renegotiating the deal right away, because he said that it’s important for Guyana to show investors that it honours contracts.
“I wouldn’t recommend renegotiating right away because you kind of wasted that golden opportunity, at least at that point [in 2016].”
He said that it is never the case that such a deal would stay as it is for decades.
“I don’t think that we’re going to just sit down for the next 40 years and say well, that’s the end of the contract for the Stabroek licence. I’m sure things are going to be a lot more fluid over a 40 year period.”
When should government look forward to renegotiating the contract?
For Deygoo-Boyer, answering that question will require one to look at how changed circumstances affect Guyana’s negotiating position.
Some have argued that Guyana has already gotten to a very strong bargaining position. But the businessman said that Guyana still would have to look forward to geopolitical and climate developments, and returns on investment, among other things in the near term of at least six to eight years.
How Guyana approaches renegotiation, for Deygoo-Boyer, comes down to Guyana getting its hands on an expert, independent negotiator.
This is because, he explained, people can develop relationships with the other side which could inhibit their ability to take a strong stand.
“I’d create a nice separation… I’m able to maintain the relationship with the operator because I have an international law firm or consultant negotiating on my behalf.”
He said that, at some point, Guyana could say to the operator “Here are the recommendations from my international negotiator. Yes, we’re friendly, I’m glad to have you in the country, but these are the recommendations. These are the studies that were done. This is the average benchmark for royalties in this way. This is the way I would like to carve up our regime… These are my hired negotiators… This is what they recommended. So this is what I’m fighting for.”

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