MR. ALISTAIR ROUTLEDGE: GUYANA NEEDS A FAIR DEAL CONTRACT

Aug 28, 2020 Letters

Dear Mr. Alistair Routledge:

I watched the video of your press conference Wednesday night. I must commend you. You are a cool dude. You are so practised; you must have done this a hundred times around the world before you came to this new “frontier province” called Guyana.
Alistair, (with Editor’s permission) permit me to make these points:
(1) “Sanctity of Contracts” is a nice phrase in Contract Law, but as a practical matter what does it really mean? If one of the signers can be proven to be compromised or worse, duped, is it not reasonable for both parties to sit down and review this contract? Lack of consideration – 2% royalty for Guyana? Suriname is getting 6.25% royalty in the same PSA-type contract. Seventy-five of every 100 barrels go for Cost Recovery. In Suriname, it is 60 barrels. In Guyana, profit sharing is on 25 barrels out of every 100. In Suriname, it is profit sharing on 40 barrels.
(2) Alistair, in Guyana, we understand basic Math. We know that for the foreseeable future years, (with no ring-fencing of costs), Guyana would be getting no more than 14.5 barrels out of every 100 (net is like 13). This is not a fair contract. Waving this “sanctity of contract” flag before our faces is probably intended to humiliate, not appease or placate us.
(3) To say nothing of 60 vs 600 oil blocks (violation of our State Law); to say nothing of GoG issuing receipts to ExxonMobil for taxes paid, when none in fact will be paid.
Alistair, please tell your Board of Directors, this Contract contains: (a) two items that are flat-out illegal; (b) 2% royalty is a violation of the norms or standards around the world. (c) Contract is front-loaded to favour the Oil Company – 75/100 barrels; Suriname’s 60/100 is much fairer.
Guyana is not threatening confrontation or litigation. It asks only for fairness and a little bit of respect. And, please don’t label us a “frontier province”. We are deeply offended by that label.
My commendations to that reporter (sorry I didn’t get her name) for being persistent about letting Mr. Routledge know this thing is more about Guyana getting a fair share of revenues – and less about an engineering review of Payara.

Mike Persaud

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