International watchdog groups believe Exxon calling the shots on Guyana’s oil

Oct 03, 2022 News

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…Article 13 says PPP/C Govt dancing to companies’ tune to stay in power

Kaieteur News – Based on interactions with international watchdog agencies, local transparency group Article 13, says it is becoming increasingly obvious to anti-corruption advocates and other stakeholders that US oil major, ExxonMobil is calling the shots when it comes to Guyana’s lucrative oil find in the offshore Stabroek Block.

Given the government’s continued resistance toward renegotiating the lopsided 2016 Production Sharing Agreement (PSA) it has with Exxon’s subsidiary Esso Exploration and Production Guyana Ltd (EEPGL), the body says stakeholders are also beginning to think that the government is deliberately supporting this unfavourable agreement in return for the oil companies’ support in maintaining political power. Article 13 founder, Dr. Yog Mahadeo said that the situation in Guyana continues to be viewed from all sides with the discussion now increasing as to why the Guyana government is not seeking more from its oil contract.

He told the newspaper that, “in my recent interaction with international watchdog groups, it is now being adjudged that the Government’s position is being dictated by Exxon. In exchange for not renegotiating, the Government is assured massive support through the next elections.” Dr. Mahadeo continued that, “in other words, there is a growing belief that the government has been assured it could stay in power by agreeing to non-negotiation and to facilitate high cost projects to boost cost oil.”

The transparency advocate said that this show of reluctance on the government’s part leaves Guyana in a very vulnerable position; pointing out, that in the current administration’s failure to be bold and demand a better oil share for Guyana, they have not only exposed their corrupt ways, and how weak they are to acting correctly, but they have exhibited their intention to stay in power through the adherence of the oil companies’ calling.  Dr. Mahadeo told the newspaper that Article 13 has always supported the renegotiation of the one sided oil contract as more benefits could be secured for the nation. “We said from day one, our position has been consistent, that is, renegotiate this rotten contract so that Guyana can benefit. The current government said the same before getting to power and then the slick of oil made them change their position,” Dr. Mahadeo said.

He charged that “government’s handling of the oil contract exemplifies its embrace of corruption; putting a corrupt government and a corrupt contract in context.” Dr. Mahadeo maintained too that, “the government has shown the oil companies that we are a country with weak leaders who cannot take hard decisions for fear of personal loss.” He said that the government prefers to “stay in power with support from the oil companies and the US government until this position changes on the contract,” instead of getting for Guyanese the benefits deserved.  As such, “The reach of corruption is now leaking all over, in all ministries.  Nepotism and cronyism is the legacy of this government,” the Article 13 member insisted.

In its unrelenting stance for the renegotiation of the 2016 PSA, Dr. Mahadeo had supported the argument of former EPA head Dr. Vincent Adams when he made the point that the Guyana/Exxon PSA could be renegotiated for the simple fact that a major change had occurred, that what the oil contract covers now was not what was negotiated for in 2016, when the oil find was significantly smaller. The civil rights advocate agreed that “the context of the contract has changed.”  He said what was represented before is now different. He added that the fact that since 2016 the volume of oil being borne out of the same agreement that envisaged a fraction of what is now expected, is itself a call for renegotiation.

Dr. Mahadeo, in his submission, went further to cite the 2020 Clyde & Co report; reminding Guyanese that the independent find highlighted Guyana’s disadvantageous position during the negotiation of the 2016 contract.  Clyde & Co, highlighted that it was a deliberate move by the oil companies to have Guyana commit to the contract ahead of the Liza 2 results; and before the government actually understood the massive wealth that was still being discovered in the prolific offshore Stabroek Block.  Dr. Mahadeo reminded that in January of 2020, the Clyde & Co report, section 3.11, noted that the oil companies appeared to have placed a lot of pressure on the Government to sign the oil deal within a short space of time. That report, he continued, noted that, “the reason given was related to commitments for drilling rigs.” However, the report revealed that EEPGL wanted to have the agreement in place “prior to LIZA-2 well results becoming fully known and understood by the Government.”

 

 

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