Glenn Lall: Pres. Ali must press Blinken on renegotiation of lopsided Exxon contract

Jul 06, 2023 ExxonMobil, News, Oil & Gas

---

…as two officials meet for historic talks in Guyana

Kaieteur News – With Russia threatening to cut crude oil exports by 500,000 barrels per day (bpd) in August in a bid to ensure a balanced market, today’s meeting between US Secretary of State, Antony Blinken and this country’s top leaders will take on greater significance.  with oil being a high priority, if not the central point of discussion.

Today’s meeting provides Guyana with an opportunity to table its own priorities, one of which has to be movement to the renegotiation table with the lopsided ExxonMobil contract, advocate for a better oil deal, Glenn Lall has said.  He said this is a precious opportunity that must be taken advantage of, and leveraged to the nation’s benefit.

Blinken’s visit no doubt would have been planned long in advance, but it was only on Monday Russia’s Deputy Prime Minister Alexander Novak announced that country’s plans to cut exports, a not altogether unexpected move. Mr. Lall said that the US Secretary of State will more than likely push this country to ramp up its oil production to help even off supplies, although Guyana’s take from profit oil and royalty are embarrassingly low. “We expect the Secretary of State to urge this country to ramp up its production…and that is in line with what the Vice President Bharrat Jagdeo and ExxonMobil have been saying,” Lall told this newspaper. Guyanese have increasingly been pushing back at the lopsided oil contract the Guyana Government of APNU+AFC had signed with the US oil giant and which the present PPP/C administration has refused to renegotiate. The US’s expected push for more production out of Guyana, and on an accelerated timetable, could be offset by Guyanese leaders seizing the opportunity to push for something to give on the suffocating contract so Guyana can get more for its oil wealth.

The Russian announcement of export cuts came minutes after Saudi Arabia said it would extend its unilateral oil production cut of 1 million bpd into August. “As part of the efforts to ensure a balanced market, Russia will voluntarily reduce its oil supply in August by 500,000 barrels per day by cutting its exports to global markets by that quantity,” Novak said in a brief statement. The top oil official in Russia didn’t give any figures as to the volume of the Russian production and exports for August, nor the baseline from which the cut would be made.

The August cut in exports would mean an additional cut in oil production by 500,000 bpd in August, Novak’s office told Russian daily Vedomosti.  These cuts could bode ill for Europe when the weather gets cold and demand for energy steepens, though some cushions should be in place following last year’s supply shocks and traumas.

Saudi Arabia will be producing around 9 million bpd in both July and August after extending the voluntary cut into next month. “This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC Plus countries with the aim of supporting the stability and balance of oil market,” Saudi Arabia said Monday. Russia, for its part, has enjoyed resilient crude oil exports – much higher than anticipated last year – even after the Western sanctions and the price cap on its crude and petroleum products. China and India are snapping up cheap Russian barrels, and Russian exports for most of June were still around 250,000 bpd higher compared to February, which serves as a baseline for the 500,000-bpd production cut Russia has promised this year.

Oil price.com reported that Monday’s nearly simultaneous announcements from Russia and Saudi Arabia are noteworthy, after Saudi Energy Minister Prince Abdulaziz bin Salman said at the latest OPEC+ meeting in early June, referring to Russia, “We discussed with Russia the issue of its production and asked it to clarify its data, and we have strengthened the concept of transparency with Russia about its oil production figures.”

Range of priorities

Meanwhile, a Department of Public Information release stated that Blinken  and President, Dr. Mohamed Irfaan Ali will discuss a range of priorities, including food and energy security, climate resilience, and finance. The US top diplomat will make a stopover here following a visit to Trinidad and Tobago where he met with that country’s leaders as well as heads of government attending the Caricom Summit. In addition to President Ali, Blinken is expected to meet with Foreign Minister Hugh Todd, and key members of the Cabinet.

The US Embassy here had said that the visit by the Secretary of State will build on Vice President Harris’ historic June 8 visit to The Bahamas, where she co-hosted the U.S.-Caribbean Leaders Meeting. Secretary Blinken will engage on pressing issues in the region with the represented heads of governments, including Trinidad and Tobago Prime Minister Dr. Keith Rowley, and incoming CARICOM Chair and Dominica Prime Minister Roosevelt Skerrit.

Wazim Mowla associate director of the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center wrote last week that Blinken’s trip to the Caribbean cannot be a wasted opportunity. He said on the surface, this is a win for US-Caribbean relations, as it comes off the back of several high-level US visits to the region.  According to Mowla for the United States, the consequences of insufficient action so far are evident, noting that given the enormity of the challenges facing the Caribbean, the region’s leaders are seeking solutions to their problems elsewhere. The writer noted that Barbadian Prime Minister Mia Mottley has taken to the global stage to overhaul MDB financing, while Guyana is welcoming investment in its oil sector from all corners of the world, and Trinidad and Tobago is increasing engagement with Venezuela over shared gas reserves. “Other Caribbean leaders see African countries, India, and China as attractive partners that can provide financing, investment, and aid,” Mowla wrote in the piece which appeared on the Atlantic Council’s website.

Meanwhile, the DPI said Bureau of Western Hemisphere Affairs Deputy Assistant Secretary for Caribbean Affairs and Haiti, Barbara Feinstein last Friday said the Secretary’s visit to Guyana will further deepen America’s diplomatic engagement with 14 steadfast democracies. Blinken’s discussions with President Ali will centre on key bilateral issues, including food and energy security and decarbonisation, climate resilience, regional migration, and building local capacity.

During a meeting with the Secretary of State in Washington DC in July 2022, President Ali said Guyana welcomes the opportunity to further strengthen its relationship with the US as a strategic partner, particularly during its period of growth. He also highlighted the countries’ shared values and their quests to strengthen the region.

In his remarks then, the US Secretary of State said Guyana has been a very strong partner for his country and a global leader. The two countries, he added, will continue to advance discussions and collaboration in areas for cooperation. Blinken emphasised that the US is eager to continue to deepen and strengthen the partnership, which will also redound to the benefit of the region, since Guyana’s capital ─ Georgetown, is also the seat of the Caribbean Community (CARICOM).

---

• Antony Blinken, businessman, Dr. Glenn Lall, leaders, United States Secretary of State

---