2019 interview exposes Jagdeo's promise to renegotiate lopsided Stabroek Block deal

2019 interview exposes Jagdeo’s promise to renegotiate lopsided Stabroek Block deal

Feb 05, 2023 News

Kaieteur News – For more than two years, Vice President (VP) Dr. Bharrat Jagdeo has condemned every voice that dared to remind him of the People’s Progressive Party Civic (PPPC) government’s promise to renegotiate the lopsided Stabroek Block contract. He out rightly rejected the notion that the party ever made such utterances.

A 2019 interview which recently surfaced has exposed the VP as committing to change the lopsided arrangement.

The interview in question was recorded on 94.1FM. Jagdeo was at the time, serving in the capacity as Opposition Leader.

Vice President, Bharrat Jagdeo

Here is an excerpt of what the politician had to say: “They sold us out to the foreigners- the oil companies. Every time there is a find there, our people should be sad because nothing comes our way. We are going to renegotiate those contracts because that’s not what we had in mind. When we were in the early days we were coaxing the people (ExxonMobil and partners) to go along. They (APNU+AFC) came into office (and met) 3 billion barrels of proven reserves and then gave up zero royalty, no taxes, no ring-fencing, no local content for these people to spend any money here.”

He continued: “Paying our people GY$72,000 a month when the foreigner is getting US$10,000. Bringing water from California to drink here. We are paying for all that. Landscaping they wanna contract it to a company coming from abroad and the Trinidadians and others are just walking in not only in the oil sector but they are getting all the prime lands too… So that is why I got back into politics. I’m not prepared to see this happen, I have no desire to be President again.”

Since its release to the public in 2016, many stakeholders have said that the Stabroek Block Production Sharing Agreement (PSA) has some of the world’s most unusual provisions when compared to what is accepted as best practices.

To understand how deeply flawed the document is, Kaieteur News in 2019 also, did an extensive review of 130 PSAs.

It turns out that out of 130 PSAs this newspaper examined; Guyana’s is in a class by itself. It is the only country that has more than a dozen odd provisions all in one place.

For example, the PSA sees the government paying the contractor’s income tax out of the country’s share of the profits. However, none of the 130 PSAs examined shows this arrangement.

Further, Guyana’s PSA is the only one out of 130, which has very moderate work obligations for contractors who are vested with offshore licenses.

Additionally, the Guyana-ExxonMobil PSA is the only one out of 130 contracts, which has no ring-fencing provisions to prevent costs of unsuccessful wells being carried over to that of successful wells.

There is also no sliding scale for royalty to increase as production improves.

And that is not all. Guyana’s PSA is the only one out of 130 that allows insurance premiums to be fully recovered as well as interest on loans and financing costs that are incurred by the contractors.

In spite of being well aware of the foregoing, the PPPC administration has maintained that the contract will be preserved as is.

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Contract, Dr. Bharrat Jagdeo, People’s Progressive Party/Civic (PPPC), Stabroek Block, Vice President (VP)

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