PNC still in talks with lawyers on Exxon’s 20% relinquishment of Stabroek Block

Nov 10, 2023 Court Stories, ExxonMobil, Features / Columnists, News, Oil & Gas

Kaieteur News – The Opposition on Thursday said it has not yet determined the way forward as regards taking legal action to get government to expose records to justify the extension of the relinquishment provision to oil giant, ExxonMobil.

That extension allows the operator to hold on to 20% of the Stabroek Block, which was expected to be handed back to Guyana this year, until 2024. It was former President David Granger who had approved the extension of the relinquishment provision in 2020, weeks before the General and Regional Elections. The approval however required reports by the oil company to prove its operations were impacted by the COVID-19 Pandemic.

Vice President, Bharrat Jagdeo had told reporters that government was satisfied that the company’s operations were indeed affected by the pandemic. He however made it clear that government did not need to prove this to the Opposition parties or any other interested stakeholder to ease public tension.

Leader of the Opposition, Aubrey Norton during a press conference last month told reporters, in response to a question, that government should be held to account on this matter. He said, “We believe the government should be held accountable…we will have to look at the laws to see if there is a case…the lawyers will have to look at it and decide on the legal way forward.” During its weekly press conference yesterday, the Opposition said it has not yet reached a conclusion.

In the absence of the Leader of the Opposition, his Economic Advisor, Elson Low explained, “As it regards legal action, we haven’t come to a conclusion on that front, but what is clear is that the government, and this is based off the initial relinquishment extension agreement signed by (former) President Granger, that there needs to be regular reviews to whether or not the operations of the operator had been affected.”

The Opposition used the opportunity to renew its calls for the evidence of impacts to Exxon’s operations to be made public. On the other hand, it noted, “Now if you don’t have reviews, I imagine it would be difficult for you to make it public.”

Low argued that this recent stance by the administration to hide the reports from Exxon highlights the government’s lack of transparency in the management of the oil and gas sector. “If there exists a relinquishment agreement which says that you have to produce assessments…why hasn’t the government published its regular assessments? That first of all is a matter of lack of transparency,” the Opposition urged.

The Stabroek Block which spans 6.6 million acres and holds over 33 oil discoveries is so massive that it is equivalent to 600 oil blocks offshore Guyana. Exxon and its partners which include Hess Corporation and CNOOC Petroleum Guyana Limited were expected to give up 20 percent of the block this year which could then be used as part of an auction to garner more funds for the country. The extension granted by the former President and supported by the present administration will however allow the company to continue exploration activity in the Stabroek Block which is bound to what has been described as the world’s worst oil deal.

Meanwhile, other blocks will be subjective to more competitive terms such a 10 percent royalty compared to two; companies will also now be required to pay a 10 percent corporate tax, compared to none in the existing agreement with Exxon. Additionally, 65 percent monthly cost recovery will be charged compared with 75 percent in the 2016 deal.

Block, court, legal, oil, opposition, relinquishment

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PNC still in talks with lawyers on Exxon’s 20% relinquishment of Stabroek Block

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PNC still in talks with lawyers on Exxon’s 20% relinquishment of Stabroek Block

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