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Exxon official tries to disguise “sh**ty” 2016 Stabroek Block deal as sweet for Guyanese
– KN Publisher slams deal as devious, economic horror story
Kaieteur News – Vice President, Dr. Bharrat Jagdeo has in recent times, described the 2016 Stabroek Block Production Sharing Agreement (PSA) as being a “sh**ty” deal. But officials at ExxonMobil Corporation, one of the three companies the agreement was inked with, believes otherwise.
Specifically, Head of ExxonMobil Guyana, Alistair Routledge feels the deal offers Guyanese more benefits than it does for the investors.
ExxonMobil Guyana Head, Alistair Routledge
During a recent engagement with members of the media, Routledge said the widely publicized view that ExxonMobil, Hess Corporation and CNOOC Petroleum Limited, are walking away with the lion’s share of benefits from the 2016 PSA is untrue. He also said that talks of renegotiating the deal to seek a supposed “rebalancing of terms” would be destructive to investor confidence.
Routledge said, “Guyanese are benefitting more than the investors and it is very clear under the Stabroek Block Production Sharing Agreement that 50 percent of the profit goes to the country and 50 percent to the investors. But then in addition to that, there is a two percent royalty which comes out of the investors’ share of the profits from the block. In essence, 52 percent goes to the country.”
He added, “Now beyond that, what is incredibly important for any country or any business is the stability and we have made now over US$30B worth of investment commitment to the country based on the contract as it stands. To change the contract when you have already made that level of commitment would be very destructive to investor confidence in the Stabroek Block and I would expect more widely in the country.”
In a brief comment, Kaieteur News Publisher, Glenn Lall said Exxon Guyana’s Head is correct to an extent but is clearly trying to deceive Guyanese about the devious nature of the Stabroek Block deal.
KN Publisher, Dr. Glenn Lall
The KN Publisher said Exxon and partners are not telling the citizenry that for every barrel produced, they are snatching 75 percent of the oil first to sell and cover their investments. The remainder, 25 percent, is called profit oil. He said this is what is shared 50/50.
Lall said, “What he is trying to do is nothing but tie numbers together to paint this beautiful story when it is more than a horror movie. What he is not saying is that Guyana is receiving 50 percent in profit oil. But what he is not saying is that you are getting 50 percent of a quarter of a barrel of oil and they are getting the same quarter barrel too. This is what they keep on pushing down the Guyanese throats as half and half profit share.”
The businessman further noted, “To add insult to the horror, they want us to believe that the dutty two percent royalty they are giving Guyana is coming out of their profit share. In other words, they are trying to tell us that Guyana getting more than them. How on earth Guyana can get more than them when they already huff out 75 percent of the barrel in which we don’t know or never had a say on the costs they are taking out.”
The newspaper publisher said this horror story will continue to plague Guyanese for the rest of their lives in the absence of ring-fencing provisions. Lall said such provisions would have ensured that Exxon cannot take the revenues made from the Liza Phase One Project to cover expenses for its other developments.
He said, “Just imagine, we already paid off all the investment costs on the Liza One. We should be getting our flush half barrel of oil and profits now. Because of the lack of ring-fencing provisions on that project, Guyana will continue to get half of a quarter of a barrel for the rest of the life on all projects…”
Lall said it is sickening that Exxon’s head would try to paint any other picture to right-thinking Guyanese.
- Alistair Routledge, Dr. Bharrat Jagdeo, ExxonMobil, Glenn Lall, Stabroek Block Production Sharing Agreement
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