Payara signing achieved nothing if Exxon oil spill commitment is not revised in Lisa 1 and 2 EIA

Oct 30, 2020 Letters

DEAR EDITOR,

When the PPP Government moved from “will not be pressured into signing” to signing the Payara FDP for Exxon within a month, it meant that none of the 55 billion left on the proverbial table by APNU+AFC would be coming Guyana’s way in the future. Our biggest bargaining chip – an additional 220,000 barrels per day from the Stabroek block, touted by wall street as a necessity for the survival of Exxon was thrown out the window. The VP had cast the die on any contract renegotiation when he said, “It’s wishful thinking that you could have done that now”.
Exxon could not have walked away from the Stabroek block as it had threatened, given the known dire straits the company is in.
Looking back at our PSA! Trotman had said he didn’t read the contract before signing. Was it something Exxon people said to or had given him that made it seem unnecessary to even read what he was signing on behalf of the Nation? Jan Mangal, presidential advisor on oil and gas never had an input. On a Global scale, the Stabroek PSA has the lowest Average Effective Tax Rate (AETR) of “government take”. Add the lowest royalty (2 percent) and the picture becomes more dismal.
Why shouldn’t the present Government (if it is mindful of the people’s best interest) clamour for a renegotiated contract? At least, show some fortitude by publicly asking, while delaying the signing of the Payara FDP would have suffice somewhat. Let the Guyanese people and the world see that at least you tried to correct an injustice done to your people. Instead! The Ali Government bowed out on the same level as the Coalition. Why?
It is here the plot begins to thicken! A renegotiated PSA would have surely had repercussions on the Kaieteur and Canje blocks giveaway initiated by a former PPP Government. That would have opened a “can of worms” for the present Ali administration. The savagery of the Kaieteur and Canje giveaway is that both blocks now sit in the hands of Exxon at 35 percent stake and operator and the price and to whom they paid for these goodies remain a secret. Should the nation continue to tolerate unsolved mysteries of this kind in a sector that is so important?
Secretary of state, Mike Pompeo, speaking prior to his Guyana visit was quoted in the Miami Herald, September 16th; “We’re not trying to broker contacts between the oil companies. We’re going to meet with the oil companies, see how they’re doing; see what their plans are.” There is no report of Pompeo speaking to Exxon officials here, he didn’t need to, but he did speak to Government people and as soon as he was gone they signed Payara FDP. Knowing the kind of clout held over politicians by Exxon, one has to wonder if Pompeo was instructed to ask the Ali administration to swiftly return a favour. Covert action is the name of the game!
The only good thing that allegedly came out of the Payara signing is Exxon’s commitment to pay for an accidental oil spill in the Payara field. No word of Exxon’s commitment being revised for Lisa one and two EIA. Guyana could still be liable for an accidental spill in Lisa 1 and 2 fields. If that is the case, nothing was achieved at the Payara signing.

Yours respectfully,
Rudolph Singh

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