What’s in it for Jagdeo?  

Sep 25, 2022 News

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– Glenn Lall questions VP’s commitment to extract better from oil contract with ExxonMobil  

Kaieteur News – Against the background of his government’s refusal to renegotiate the lopsided oil contract with ExxonMobil and constant posturing regarding extracting favourable terms for Guyanese, transparency advocate and Publisher of the Kaieteur News, Glenn Lall is questioning Vice President Bharrat Jagdeo’s commitment to this country.

In fact, he has asked whether the former President has vested interest in ExxonMobil. “What is he getting out of this oil deal that he is not moving in the direction to have a better deal for this country?  What has overcome this man that he is not his usual self when it comes to this oil sector? You guys not smelling something burning?” Lall remarked.

He added, “When in opposition, he was a big bad man, say this contract was the worst and is a crime, now he is in command with all the powers in his hands and talking about sanctity of contract…Not even opening his mouth to say ExxonMobil come sit down and give these brown, black and purple people of this country a penny more, something they can hold on to, something to make them feel nice.”

Mr. Lall said what he has been seeing and feeling is a Jagdeo who will not change or touch that “lopsided contract that he ‘cussed’ Granger them for signing, plain and simple.”

Deal bad, but no change  

Dissecting his interview with Jagdeo a few weeks ago, Lall on his last Friday programme contrasted the Jagdeo while in opposition and the man today. “Our VP when he was in opposition, ‘cuss down’ the Coalition Government for signing that oil contract but now he is in love with that contract. That contract that will send generations to come into extreme poverty by him not making a move to have it changed, he is doing everything to preserve, defend and uphold that contract,” Mr. Lall told his radio and internet audience last Friday night. Jagdeo during an interview with Mr. Lall recently was adamant that due to the proverbial sanctity of contract doctrine, his government will not seek to renegotiate the deal, although acknowledging it is flawed. He maintained that the mere 2 percent royalty, massive tax breaks, and the absence of a ring-fencing provision, are three key flaws of the 2016 Stabroek Block Production Sharing Agreement (PSA), but said his government will not seek to renegotiate the deal to correct those identified weaknesses. During his almost three-hour long interview with Lall, Jagdeo was asked a series of questions about the deal that was signed with ExxonMobil Corporation affiliate, Esso Exploration and Production Guyana Limited (EEPGL) and its partners, Hess Corporation and CNOOC Petroleum Limited. Lall’s first question sought to ascertain if Jagdeo maintained his criticisms of the contract, which were first divulged during his time in opposition.

Jagdeo said, “I do, I do and I will tell you now why I maintain the position that the contract is lopsided. We identified several areas; one was the total take for the Guyanese public. We believe that when the contract was renegotiated by (former Natural Resources Minister, Raphael) Trotman that we already had three billion barrels of proven resources in the ground and that opportunity should have been used not to weaken the 1999 contract but to add benefits to it.”

The VP said the 2016 contract was drafted by Exxon and sent to the former APNU+AFC government. Jagdeo said he does not know what internal process it went through but it was signed by Trotman almost overnight and contrary to advice. The official reiterated that while the contract is lopsided, his government will not renegotiate it as previously stated while in opposition. “We will ensure that we have better contract administration. If we fail to have better contract administration and there was no room for that then we’ll take a harder line,” the VP added.

The KN Publisher then asked the VP to explain to citizens what differently he would have done from the Coalition during negotiations in 2016 with Exxon. Jagdeo was keen to note that issues of taxation in the contract would have been better addressed as it is an area of contention now with Exxon and the Guyana Revenue Authority (GRA). “We have issues with taxation and even now, we have a dispute with Exxon about vehicles. They wanted to bring in 20 SUVs and we said that’s not covered by the agreement; you have to pay taxes on those, that it’s not a blanket concession,” the Vice President noted. He noted that the PPP/C Administration would have also addressed the size of the royalty as well as the absence of ring-fencing provisions, which would have prevented ExxonMobil from deducting expenses related to other projects from the revenues of oil producing projects.  “Jagdeo uses that word sanctity as if he is a born again Christian, and I say this to some of you, that the word sanctity comes from the Bible, it is an old biblical word which means you have to stick to your word, abide by the agreement or the contract. You cannot modify, amend, renegotiate or change anything after you signed an agreement between two people. It’s a principled position with two individuals where you shouldn’t go back on your word, but ever since, that principled position, has been broken and changed millions of times all over this world, especially when one person is deliberately taking advantage of the other person – we have seen many, many individuals and companies break away from that principled position and change agreements between two parties – it’s nothing new,” Mr. Lall explained.

One-sided  

He said if a contract only benefits one side and one side only then it is not an agreement, “it’s a giveaway, a sell out or plain robbery, so how the word sanctity comes into play here in Guyana, when ExxonMobil and others taking all our oil and leaving us with crumbs? You tell me how the word sanctity comes into play here?  You tell me how I must stick with a principled position, when my leaders sign away my country – that just can’t happen, it cannot, it should not and it must not.  I just don’t have it in me; can’t bring myself to that kind of slavery and surrender, not even for my enemy, no one should accept that,” Lall insisted. Outside of Mr. Lall, scores of persons have called on the government to seek a renegotiation of the contract. Only recently even the major opposition also joined calls for changes to the contract.

Mr. Lall said everyone knows that the Exxon contract with Guyana is one-sided and lopsided in favour of the oil companies, and every citizen on earth “including our very own politicians have been saying that we have gotten the wrong and rotten end of the stick with that contract, so why should we abide or stick with that so-called principled position of sanctity of contract?  Why?  Sanctity of contract is the new weapon that the rich and powerful tie up poor nations and their people with.  Before they used big guns and big boats, now they come up with this weapon over we head called sanctity of contract and Jagdeo repeating that mantra more than Exxon – can you believe that?”

Mr. Lall added that Jagdeo and President Irfaan Ali while in opposition said umpteenth times how terrible the contract is and what it means to the Guyanese people, and once they get into office, they will renegotiate and change it. “Jagdeo when he was ‘cussing’ the contract signed by former Natural Resources Minister, Raphael Trotman, he never once mentioned the word sanctity of contract, however, today when they are in office, we are hearing a different tune. Today, we are hearing how we have to abide by the sanctity of contract, why?  The way we hearing them talking about this word sanctity of contract, you would believe that the word sanctity is imbedded, is printed on the cover and on every page in the contract.”

Professor Kenrick Hunte, Former Guyana Ambassador to South Africa in a recent letter to the press commenting on the government’s refusal to renegotiate said thusly: “Given this non-interference by Guyana; and in light of the fact that EEPGL will be accelerating the extraction of Guyana’s oil by introducing several new floating production storage and offloading (FPSO) ships, it is conceivable that come 2036, EEPGL will be ready to shut-shop and leave, as all the commercially viable oil would have been extracted and Guyana will have nothing to get. We have seen similar behaviour in the extraction of other non-renewable resources when the impending tax payment date is imminent.

I would therefore contend that adding new FPSOs was probably not in the original contract; and it is on this premise that a renegotiation can be introduced, for more FPSOs will enhance production and reduce the economic life of the Stabroek Block. Consequently, I would further contend that unless action is taken to allow Guyana to get an equitable share of its patrimony, one can only think of the Mighty Sparrow’s song in which I have modified a few lines for context and alignment. Can you imagine how they planning to dig out (we)… liver’ … (and), not a police in the area! … (E)very man in the gang had a white-handle razor… Ten to one is murder!”

 

 

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