“Guyanese should demand change to that lopsided Exxon Contract before voting June 12”

Jun 06, 2023 News

Glenn Lall:

Kaieteur News – While the People’s Progressive Party/ Civic (PPP/C) and the Opposition, A Partnership for National Unity (APNU) are campaigning for next week’s Local Government Elections (LGE), Kaieteur News’ Publisher and businessman, Glenn Lall is urging Guyanese to boycott the polls until the politicians correct the lopsided ExxonMobil Guyana contract.

Kaieteur News Publisher and Radio Host, Glenn Lall

In 2016, Guyana signed onto a Production Sharing Agreement (PSA) with the oil major, which has been heavily criticised for being lopsided and benefiting the oil company more than the country.

Recently, Kaieteur News reported that Exxon and its partners made a handsome profit from the Stabroek Block last year totalling GYD$1.23 trillion (US$5.9B). This is more than double what Guyana has received since the creation of its Natural Resource Fund in 2020. As of April, Guyana has received some US$2.4B in profit oil and royalty from the Stabroek Block operations.

According to the 2022 financials for Exxon’s subsidiary and operator for the block, Esso Exploration and Production Guyana Limited (EEPGL), it earned $577.7B in profits, a substantial increase over its 2021 earnings totalling $132B. Hess Corporation’s 2022 profit was listed as $322.7B while CNOOC was $329.8B. Even though the contract is lopsided, the deal remains untouched as the government continues to approve more of Exxon’s US-multi-billion projects in the Stabroek Block.

In one of his recent TikTok messages, Lall said, “June 12th coming, the PPP and the PNC want something from y’all, a certain finger.” To this end, he asked citizens if it isn’t time for them to demand “something in return for that finger?”

Lall said that citizens should demand that the leaders sit together and correct all foreign contracts, particularly the Exxon deal. The publisher described the deal as one “sucking the blood out of our bodies and that of future generations.”

He encouraged citizens to ‘wake-up’ and understand the seriousness of what is happening in the country. “If the PNC and the PPP cannot sit together to do what is right for you and I, and this country, then stay home,” Lall said, adding, “let them know you cannot live on grants, handouts and once-a-year bonus, in a country that is the richest per capita per person…” He added: “no man, no don’t do this to y’all children, we all deserve our rightful share of what God Almighty has blessed us with.”

The Chief Executive Officer (CEO) of ExxonMobil Corporation, Darren Woods, earlier this year at an international conference boasted about the “story of success” Guyana.

However, while Guyana’s oil and gas resources have garnered the oil giant immense profits, what the country earns on the other hand have caused several persons in society to call on government to renegotiate the contract. The 2016 deal gives Guyana an industry-low 2% royalty. Presently, Guyana shares revenue with ExxonMobil after the company deducts 75 percent towards the cost incurred to develop the resources in the Stabroek Block.

This arrangement, with the lack of ring-fencing, sees Guyana paying for projects that are yet to commence production activities. Each month bills from future producing developments are added to the list of expenses to be cost recovered by Exxon. After the 75 percent is deducted to pay back the oil company, Guyana then shares 50/50 of the 25 percent remaining with Exxon as profits. This amounts to 12.5 percent of profits from the operations. Also, under the signed deal, Guyana has agreed to, under the taxation provisions, to pay ExxonMobil’s share of Corporation and Income Tax. As such it would mean, that Guyana foregoes each year, billions of US dollars. On top of this, documentation to this effect is then provided to the US based company allowing it to not have to pay any taxes in its home country for its earnings overseas.

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