Latest update February 24th, 2025 9:02 AM
Stabroek Block agreement is one of the most lopsided deals signed in the history of Guyana – It is a mistake we must learn from – AG
Kaieteur News- Minister of Legal Affairs and Attorney General (AG), Anil Nandlall, during a recent interview stated that the Product Sharing Agreement (PSA) that Guyana signed with American oil giant, ExxonMobil is one of the most lopsided agreements signed in the country’s history.
AMinister of Legal Affairs and Attorney General (AG), Anil Nandlall.
To this end, the AG noted that the lopsided contract must be a mistake that Guyana learns from when going forward with signing future oil and gas agreements. Minister Nandlall made those statements during an interview on Globespan, titled, ‘Government’s Legal Achievement after One Year in Office.’
When questioned on the Exxon-Guyana agreement which has been highly criticised, the AG first upheld his position that that deal is one of the most lopsided ones ever signed in the country’s history and noted that he has never retracted from that position nor does he intend to.
Nandlall also expressed his dissatisfaction that one of the most important agreements in the history of Guyana was signed in secrecy by the previous government and not even the then opposition (PPP) was informed of what was being done. “No one was consulted, I don’t think the President (at the time, David Granger) knew when this agreement was signed… It’s inexplicable that an agreement of that magnitude, of that type of ramification, was treated in the manner in which it was treated,” the AG added.
However, while noting that there is a lot of mystery surrounding the agreement Guyana signed with Exxon, the Minister added that on the other side of the agreement it is legal. He explained, “The company that has signed the agreement is not going to bend over backwards. This is a company that is here for profits, it has never shown itself that it is interested in anything else and it will insist on its contractual rights.”
He noted that due to the principle of ‘sanctity of contract’, “we can’t eat our cake and have it, we made a bad deal and we have to move on and ensure that that bad deal does not follow us and we must learn from that mistake.”
Minister Nandlall then disclosed that going forward, the Government will have to deal with the issue and ensure that future licences are more favourable to Guyana.
Former Minister of Natural Resources, Raphael Trotman.
Moreover, according to previous reports, Vice President, Bharrat Jagdeo, had committed to having the revised PSA template be made available in as little as six months, while adding that it will be tougher than the one negotiated with the Exxon consortium. It was reported that Guyana’s aim is to increase its oil royalties and revamp other contract terms as part of a PSA regime for future crude and gas projects now in its draft stage.
PSA’s are common type of contract signed between a government and a single company or a group of companies in regard to how much of a country’s resource, most commonly oil; is extracted and how much each will receive. By signing a PSA, the government is awarding the execution of exploration and production activities to an oil company. In these agreements, the oil company usually stands the financial risk of the initiative and explores, develops and then produces the oil field.
If the company is successful, the company is then allowed to use money from produced oil to recover capital and also operational expenditures, commonly called, ‘cost oil’ – the remaining money is called ‘profit oil’ and this splits between the government and the oil company.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
We need a DOGE
Peeping Tom… Kaieteur News- You know, it’s funny how people in government are always talking about efficiency. And... more
Why the U.S. Should Strengthen Trade Ties with the Caribbean
By Sir Ronald Sanders Kaieteur News- A rules-based international trading system has long been a foundation of global commerce,... more
Weekend Cartoon
