Govt. uncomfortable with unfair aspects of Exxon deal

Aug 15, 2020 News

– we want Exxon to do well but Guyanese must share in prosperity – Jagdeo

The new Government has raised “major concerns” with ExxonMobil about certain provisions of the Stabroek Block agreement it is not comfortable with, according to Vice President Bharrat Jagdeo.
During a press conference at the Arthur Chung Conference Centre yesterday, Jagdeo noted, in this regard, that the guiding philosophy of the government’s negotiations with ExxonMobil and other oil companies is that the people of Guyana must benefit from oil.
“We made it clear in the meetings with ExxonMobil that we want them to do well,” Jagdeo said.
“This is directly with ExxonMobil. Forget the sector for the time being, we want them to do well here, to make money. But Guyanese must share this prosperity. It’s not sustainable otherwise. And we will insist that that happens, that Guyanese must share the prosperity; that if they’re doing well, our people must do well too, in terms of opportunities, employment, etc.”
Jagdeo noted that there are several areas in which the government has noted shortcomings. He said that in the near or medium term, those issues can result in enormous benefits for the Guyanese people, once they are remedied.
“ExxonMobil has to treat these areas seriously,” the Vice President said.
The issue he delved into was local content. In this regard, the contract has a section titled ‘Employment and Training’. While this section makes reference to the utility of local content, it has nothing to say about giving Guyanese people and businesses first preference or consideration.
On that matter, Jagdeo noted the need for local content legislation so oil companies have a legal mandate to follow. He noted that, at this time, all the Department of Energy has are “various position papers” with no draft legislation in the works.
Jagdeo noted reports in the newspapers about experts who had suggested ideas which were ignored by the former Government. Trinidadian local content consultant, Anthony Paul, had made two earlier drafts of Guyana’s local content policy which would have ensured transparent reporting on oil companies’ local content commitments had they been implemented.
They were ignored, as the former Government hired, in Paul’s place, an affiliate of ExxonMobil, Dr. Michael Warner. Warner removed the safeguards in Paul’s drafts, and created a policy that held confidentiality provisions which was later accepted as the final policy.
Jagdeo noted that the government has reached out to Paul, and that it intends to pursue local content legislation with “the best technical inputs.”
The Vice President made a point of noting that, during consultations for the legislation, the President will meet with local stakeholders himself, instead of delegating the work to the Department of Energy or junior staff.
Exxon would have to ensure, Jagdeo indicated, that its operations, as well as those of its sub-contractors, demonstrate sufficient commitment to local content.
In this regard, Jagdeo noted that the government will oppose what he described as “discriminatory wages” being paid to Guyanese people working in the oil industry.
When it comes to training, the government intends to see that ExxonMobil commits much more than it currently does.
The contract requires ExxonMobil to pay a paltry yearly amount of US$300,000 for training of Guyanese. Jagdeo said that that amount is inadequate, and will have to improve.

As for the gas-to-power project, Jagdeo explained that government is eager to move along with it, ensuring that Guyanese receive lower cost electricity.
However, he said that Government will have to get the gas at a cost that is very different from what it is in the contract, and that the price will depend on technical assessments.
The Vice President spoke too on the environment and the provisions of the contract, or the lack thereof, which speak to environmental justice. He said that the Government will have to sit with ExxonMobil and be satisfied that there are adequate provisions in the agreement to cater to that.

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