7 years after signing Exxon contract, Raphael Trotman finally breaks silence, says Exxon deal can be renegotiated

Jun 25, 2023 ExxonMobil, News, Oil & Gas

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“The demand for renegotiation of the Exxon “contract” continues unabated, and my own view is that no contract is inviolable, and therefore, it can be renegotiated…Undoubtedly, if Guyana, as a sovereign state wishes to renegotiate the contract to get “better” terms, then I would support such an initiative.”- Raphael Trotman

Kaieteur News – Former Minister of Natural Resources, Raphael Trotman, who signed the 2016 Production Sharing Agreement (PSA) with ExxonMobil and its partners, in a new book, has not only cited his support for a renegotiation of the lopsided oil deal but has also urged that the agreement can be renegotiated.

Trotman in his book titled ‘From Destiny to Prosperity’ chronicles the events leading up to the contract signing. He explained, “I have decided to write because I have been encouraged to do so- lest the history of what transpired indelibly becomes someone else’s version of the truth ‘. I write because I owe it to my children, relatives, and close friends who stood by my side against relentless torrents of criticism, vitriol, untruths, half-truths and downright nastiness…These writings do not set out to apologize, but to explain, and to do so with humility.”

On the Preface of his 201-page book, published on June 2, 2023 the former Minister said it is his view that no contract is unchallengeable and he would support changes to the deal that seeks more for the country.

He said, “The demand for renegotiation of the Exxon “contract” continues unabated, and my own view is that no contract is inviolable, and therefore, it can be renegotiated.

However, I can’t support a renegotiation based on some ‘fraud’, which never occurred. Undoubtedly, if Guyana, as a sovereign state wishes to renegotiate the contract to get “better” terms, then I would support such an initiative.”

Trotman, an Attorney-at-Law added that the newly elected administration is undoubtedly faced with many of the same geo-political and geo-strategic realities and imperatives that the former A Partnership for National Unity + Alliance For Change (APNU+AFC) Coalition government encountered. According to him, “It was easy to make bold statements and promises from the campaign podium, but when in government, realities have to be confronted. Stepping out and stepping forward is not as straightforward as many believe, and it will be interesting to see how it navigates through this intricate maze of jealously guarded interests.”

Trotman, a founding member of the AFC announced his resignation from National Assembly in August last year. The former Member of Parliament (MP) stated in his book that he had expected an “independent and credible investigation or inquiry” would have been commissioned even before 2020 when the next Regional and General Elections were due. He even cited that in his last encounter with the Publisher of Kaieteur News, Mr. Glenn Lall back in 2020, he did signal his readiness to speak to an independent Commission of Inquiry on the contract.

Trotman said, “It seemed then that he embraced the idea and would advocate for it. But, alas, I saw no clamouring for an inquiry into the signing of the 2016 Production Sharing Agreement with Exxon, Hess and CNOOC. I suppose it’s more advantageous for some to keep the conspiracy theories alive and kicking.”

As such, the former Natural Resources Minister said that he attempts to provide an insight of the inner workings of government, and in particular his portfolio of responsibilities. Trotman’s book features 10 chapters, each of which represents an individual episode in time and circumstance, which when brought together will provide context of the signing according to him.

Trotman is known across Guyana and wider afield as the citizen who signed away Guyana’s vast riches by binding the country to the abusive provisions of the PSA with ExxonMobil, Hess Corporation and CNOOC. The contract was signed by the then Minister with responsibility for Natural Resources on October 27, 2016.

In that agreement, Guyana accepted a two percent royalty on its sweet light crude and agreed for the oil companies to take 75 percent of the revenue towards the recovery of costs for their investment. The remaining 25 percent is then shared equally between the parties guaranteeing Guyana a 12.5 percent share. When Trotman signed the PSA, he also agreed to waive all taxes for the oil companies, forfeiting billions of US-dollars in revenue for the country.

Besides the fiscal terms, the country has also agreed to a number of other provisions extending an upper hand to the oil companies in the administration of the sector. For instance, the PSA shields the oil companies from the passage of new legislation that can affect their revenues. Transparency advocate, Dr. Yog Mahadeo had equated this as a mockery of the country’s Constitution.

Article 32, which lists out conditions for ‘Stability of the Agreement’ states at 32.1 that “Except as may be expressly provided herein, the Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement without the prior written consent of Contractor.”

The agreement goes on to say at 32.2 that “after the signing of this Agreement and in conformance with Article 15, the Government shall not increase the economic burdens of Contractor under this Agreement by applying to this Agreement or the operations conducted thereunder any increase of or any new petroleum related fiscal obligation, including but not limited to, any new taxes whatsoever, any new royalty, duties, fees, charges, value-added tax (VAT) or other imposts.”

Despite calls from various sections of society and international experts, the government is adamant that the Exxon contract cannot and will be amended.

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• book, Contract, PSA, renegotiate, Trotman

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