Which of Guyana’s Oil Blocks lacks a Production Sharing Agreement?

Jul 05, 2021 Letters

Dear Editor,
Attorney General of Guyana, Mohabir Nandlall, is currently on a visit to New York. Yesterday (July 2nd) he appeared at two meetings – one at Villa Russo (audience 60), second at Royal Restaurant on Rockaway Blvd (audience 150).
At the Villa Russo meeting, I asked Mr. Nandlall a question about the Stabroek Block Oil Contract. I held up a posterboard on which we compared main features (Royalty, Profit Share, Profit tax, Environment Responsibility) of the Guyana’s vs Suriname’s Contract. Suriname gets 6.25% vs Guyana 2% on Royalty.
Mr. Nandlall tried to cut me short twice. I explained that the posterboard is a nice visual to help folks easily and quickly grasp the pivotal issues of the contract. On the Royalty item I said Guyana is losing US$24 billion on 9 billion barrels reserves in the Stabroek Block (9 billion times average price of US$60 times 4.25%. At this point Mr. Nandlall cut in to say he himself had been for a few years been writing and criticizing the lopsided Contract.
I then said: “In that case I’ll make it short: Why don’t you and your government ask ExxonMobil to come back to the table to review the terms of the Contract?”
Mr. Nandlall began talking about “four corners of a contract” that must be respected. He said the contract had been negotiated in 2016 by the previous govt. And, then pronounced on the most crucial point of this exchange: He said from now on his govt. shall negotiate new PSA’s on all future oil blocks – “on our terms”.
Really? Which future blocks? I reproduce here a table, it can be found at https://www.oggn.org/infographics/guyana-oil-blocks.html, showing PSA’s have already been negotiated and signed. Which blocks is Mr Nandlall promising to negotiate?
The problem the Oil & Gas Governance Network (www.oggn.org/about) has with the Government of Guyana is that it has thus far stubbornly refused to simply ask ExxonMobil to come back to the negotiating table. Not demand, not threaten to litigate the contract.

Oil & Gas Blocks Production Sharing Agreement
Berbice https://www.oggn.org/wp-content/uploads/2019/10/berbice_psa_20130212.pdf
Canje https://www.oggn.org/wp-content/uploads/2019/06/canje_contract_20150304.pdf
Corentyne https://www.oggn.org/wp-content/uploads/2019/10/corentyne_psa_20121127.pdf
Demerara https://www.oggn.org/wp-content/uploads/2019/08/demerara_2013_feb.pdf
Kaieteur https://www.oggn.org/wp-content/uploads/2019/06/kaieteur_contract_20150527.pdf
Orinduik https://www.oggn.org/wp-content/uploads/2019/08/orinduik_2016_jan.pdf
Stabroek https://www.oggn.org/wp-content/uploads/2017/12/Oct2016-Petroleum-Agreement.pdf
Roraima https://www.oggn.org/wp-content/uploads/2019/10/roraima_contract_20120829.pdf
Just ask. Let ExxonMobil go on the record and say no. Let ExxonMobil seek refuge in “sanctity of contracts. We do not know how ExxonMobil would respond. We are of the opinion ExxonMobil is interested in a long term harmonious, stable relationship between the Oil Company and the host govt. – and would therefore be amenable to work out fairer terms to make both parties happy to sustain a long term relationship.
I conclude by saying: On the royalty item alone of one oil block the Oil companies are walking away with US$24 billion ill-gotten gains due to a lopsided contract.
These are windfall gains at the expense of the poor Guyanese people – per capita income US$4,000; about 30% of the population survive on less than US$2 a day. This Contract must not stand. We need a govt. that will stand up for the people.
Yours truly
Mike Persaud
www.oggn.org/about

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