Jagdeo dodges release of ExxonMobil’s US-multibillion expenses in Stabroek Block

Sep 01, 2023 ExxonMobil, News, Oil & Gas

---

Kaieteur News – Despite boasting that the People’s Progressive Party Civic (PPP/C) has managed to fulfill 90 percent of its manifesto promises since assuming office, Vice President, Bharrat Jagdeo continues to evade the basic tenets of transparency when it comes to the management of Guyana’s multibillion-US dollar petroleum sector.

Through the provisions of the 2016 Production Sharing Agreement (PSA) Exxon is allowed to deduct 75 percent of the monthly revenue to cover development costs. The remaining 25 percent is then split as profits between the government and the partners.

In 2022, Guyana’s Stabroek Block generated a whopping US$9.8 billion, however, Exxon deducted US$7.4 billion, leaving Guyana with a mere US$1.4 billion inclusive of profits and royalty during the period.

At his weekly press conference held at the Office of the President, the chief petroleum policy maker was asked if he believes the citizens deserve to see what the oil, being produced at the Stabroek Block, is paying for. This is premised on the fact that Guyana’s oil is being used to finance ExxonMobil’s activities relative to the oil-rich Stabroek Block but remains hidden from the public.

In its 2020 elections Manifesto, the PPP/C promised, “To ensure that our oil resource is managed responsibly, the PPP/C will…ensure that expenditures are transparently determined and go through the parliamentary process.”

Notably, the government while in Opposition assured that the sector would be prudently managed in a transparent manner; upon assuming office in 2020 however the new administration has taken a different approach. In several instances, the administration has demonstrated its intent to manage the sector in the dark.

For instance, when it comes to the expenses being incurred by Exxon, the government is reluctant to make the documents public. Previously, Jagdeo told reporters that Kaieteur News would misinterpret the expenses and ‘nitpick’. He however indicated that this is something that would be explored to keep the nation informed on the costs being recovered by the oil company operating in the Stabroek Block. https://www.kaieteurnewsonline.com/2023/03/05/vp-jagdeo-not-keen-on-releasing-exxons-cost-recovery-statements-or-forecast-of-expenses/

The VP was therefore asked on Thursday for an update in this regard when he told this publication that he would not be dealing with the issue again. In fact, he requested that the reporter move on to another question.

His response on the subject of Exxon’s expenses came shortly after the VP opened his media engagement by boasting of the PPP’s achievements since taking office in 2020.

He said, “The government of Guyana, the PPP Civic government has been engaged with fulfilling its Manifesto promises to the people of this country. We have demonstrated that we have achieved about 90 percent, in fact over 90 percent of all that we have promised.”

Previously, the Opposition raised concerns regarding the lack of transparency in the management of Guyana’s blossoming sector.

In an interview with Kaieteur News last month, Economic Advisor to the Leader of the Opposition and Spokesperson on Oil and Gas matters, Elson Low outlined that despite making a plethora of promises to the Guyanese population for better management of the petroleum industry, the government has failed to act in the interest of its people.

According to Low, “The government’s refusal to release cost oil audits or to commit to a timeline for their completion and release also violates their manifesto promises since they said they would hold oil companies accountable and verify expenditures.”

Additionally, he noted, “There is a lack of specificity as to what exactly oil revenues are being spent on, which also violates their commitment to transparency.”

He was referring to the circumstances under which revenue from the oil and gas sector is being transferred to the public purse without a clear outline of what “national development priorities” are being funded through that source.

While still arguing the lack of transparency in the management of the sector, Low highlighted that the newly approved Petroleum Activities Bill reserves the right for the government to engage in direct negotiations for the nation’s oil blocks despite the PPP promising to “ensure that blocks are competitively tendered/ auctioned.”

Low explained, “Our position is that no direct negotiations should be done without first approaching Parliament for approval of the terms of the negotiation.”

He went on to point out that the new legislation vests the Minister with excessive powers, even though its manifesto says the regulatory framework must be “independent of politicians.”

The Opposition therefore concluded that the oil sector is drowning in secrecy under the People’s Progressive Party (PPP) –led government, it continues to conduct the affairs of the industry behind closed doors.

---

• Bharrat Jagdeo, People’s Progressive Party/Civic (PPP/C), Stabroek Block, US-multibillion, Vice President

---