Biden’s Govt. would be more amenable to review of Stabroek block deal

Jan 21, 2021 News

– Guyana’s Fmr. Petroleum Advisor

Joe Biden is sworn in as the 46th US President by Chief Justice John Roberts as Jill Biden holds the Bible, at the U.S. Capitol in Washington, Wednesday, Jan. 20, 2021. (Saul Loeb/Pool Photo via AP)

Kaieteur News – With the swearing in of the United States President, Joe Biden, and Vice President, Kamala Harris, expectations are that there will be shifts in the country’s foreign policy. Former Petroleum Advisor to the President of Guyana, Dr. Jan Mangal, had said in a November letter to the editor that the change in administration could help Guyana’s bargaining position against oil companies.

Dr. Jan Mangal

“The recent change in the U.S. administration has the potential to improve the negotiating strength of Guyana versus the oil companies,” he had said, “and this could affect production [and improve Guyana’s share of oil revenue from the Stabroek Block] if Guyana leverages this strength.”
In this regard, the most contentious issue is that of the potential for renegotiation of the Stabroek block production sharing agreement (PSA). Dr. Mangal believes that the Biden administration would be more amenable to a renegotiation of the deal.Dr. Mangal is a staunch advocate for Guyana to get a better deal. He had said that, “For Guyana to succeed, it has to maximize its share of the oil revenue, and then not squander it.”
Attorney-at-Law Christopher Ram, also on Saturday pointed to a need to consider the change in US government, and how it would affect the future of Guyana’s oil industry. During a panel discussion at Moray House Trust, Ram said “The question of where we are would have to consider the implications of a change in administration in the United States of America…”
Criticisms of the lopsided deal and calls for its renegotiation have not waned over the years. Just days ago, former Auditor General, Anand Goolsarran, said “It is the future generations that will have to pay the price for what happened in relation to the Production Sharing Agreement (PSA) with ExxonMobil…”
In his criticism of the “pittance” Guyana is receiving for the exploitation of its resources, Goolsarran said that the now withdrawn Global Witness report advocating for the renegotiation of the Stabroek PSA is still valid. The early 2020 report had said that the US government should push Exxon to renegotiate the deal.
Notably, the report’s withdrawal was on the basis that Global Witness no longer intends to support renegotiation, as it would appear to contravene the anti-corruption watchdog’s climate policies. Global Witness noted that it stands by the integrity of the report’s findings. One of these was that the unfair deal would result in Guyana losing US$55 billion over its lifetime.
In April 2019, US Ambassador Sarah Ann Lynch had addressed criticisms of the deal, noting that the US government would play no role in the possible renegotiation of the deal.
“We certainly believe that Guyana is a sovereign country,” Lynch had said, “so that would be for Guyana to work that out with the private sector to see if there is room for renegotiation. We certainly won’t interfere with that.”
Furthermore, when former US Secretary of State, Mike Pompeo visited Guyana in September last year, the deal was of concern. Agence France-Presse (AFP) journalist, Shaun Tandon, had asked President, Dr. Irfaan Ali and Secretary Pompeo whether the deal is equitable. Neither man addressed the question directly. However, the President said that they did not discuss ExxonMobil and the related issues.
There were concerns that Pompeo’s visit was meant to pressure the government to approve ExxonMobil’s US$9 billion Payara project.
“We don’t apply political pressure connected to our commercial enterprises,” Pompeo had told the press.
At another point in the brief, he said the US will do what it can to “help American companies be successful, have access, have opportunities to be engaged in fair and transparent business dealings in Guyana.”