AG should use his talents and resources to make case for renegotiation of Exxon contract – Chris Ram

Dec 21, 2023 ExxonMobil, News, Oil & Gas

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Kaieteur News – Following a statement of caution to Guyanese from the Attorney General (AG) and Legal Affairs Minister, Anil Nandlall S.C regarding “critical comments” on the operations of ExxonMobil in Guyana, prominent Attorney-at-Law, Christopher Ram has called on the politician to use his legal skills to modify the lopsided terms of the 2016 Petroleum Agreement.

Ram in a stinging letter, responded to statements made by the AG in an article published by Kaieteur News in its Sunday, December 17, 2023 edition. The Lawyer argued that the government has acted as accomplices of Exxon, allowing blatant acts of misconduct to continue. He therefore posited that prudent management of the sector by government would avoid “critical commentaries” and assure the administration of compliments and commendations instead.

Nandlall said in a public statement that the Venezuelan Head of State, Nicolas Maduro during the historic December 14, 2023 peace talks in St. Vincent and the Grenadines with Guyana’s President, Dr. Irfaan Ali was furnished with several volumes of documents.

Notably, he revealed that many of the documents were public statements made on the ongoing controversy as well as critical commentaries on the oil company’s operations in the Stabroek Block and the legal challenges that have been mounted thereto.

The AG noted that the information that Maduro compiled were all extracted from the local media, as he went on to caution, “Whatever weight is placed upon them, they certainly do not and will not assist Guyana in any form or fashion…those who wish to travel this road by making such statements, or taking such actions, must now become alive to this consequential reality.”

Ram in his response to the AG said all Guyanese commentators both local and abroad are focused on a single objective which is to ensure the country benefits from the best possible deal for its people from the exhaustible petroleum resources.

To deter the negative comments on the sector, Ram urged the AG to use his legal expertise to renegotiate the Exxon contract to secure better terms for the country. He said, “As a citizen and leader, Mr. Nandlall should join the call for a Commission of Inquiry into the award of the 2016 Petroleum Agreement for which the Clyde & Co report provides compelling evidence.”

Clyde and Co, a British Law firm was hired to conduct an independent investigation into the circumstances leading to the execution of the Stabroek Block Production Sharing Agreement (PSA) with ExxonMobil Guyana, Hess Guyana Exploration Limited and CNOOC Petroleum Guyana Limited.

Among the findings in the report, it was highlighted that the oil company pressured and duped the former Coalition government into signing the deal.

The report states: “The Contractor Consortium appears to have put a lot of pressure on the Government and the Ministry of Natural Resources to secure the 2016 Agreement in a short time scale…It seems to us likely that EEPGL (now known as ExxonMobil Guyana) was also strongly driving to have a new agreement signed prior to the Liza-2 well results becoming fully known and understood by the Government. Presumably because knowledge of a ‘world-class’ discovery could have altered the government’s negotiating position.”

Exxon and its partners had announced their first discovery of oil in the Stabroek Block in May 2015, at the Liza 1 well.

The Liza-2 well was intended to help the consortium understand the volume of oil that was available for production in commercial quantities. On February 5, 2016, drilling of Liza-2 commenced in order to further evaluate the Liza-1 well.

But before revealing the true size of the Liza-2 well which found enough oil to be a standalone project, Exxon and partners rushed the previous government to close the deal with generous terms. These included a two percent royalty and a tax-free ride.

Clyde and Co said it was provided with and analyzed, drafts of the 2016 Agreement exchanged between the ministry and Exxon.

The law firm’s report states, “From this analysis, it is clear that the negotiations of the detailed terms of the 2016 Agreement were limited and took place over the period of roughly one month. The Government could have taken a different approach and tried to have extensive negotiations on the terms of the 2016 Agreement, principally to improve the fiscal terms. However, such an approach was not in the forefront of the Government’s mind.”

Ram has frequently reiterated that this independent investigation by the Law firm is enough to justify a renegotiation of the contract.

Notably, the PPP government before it was elected had promised to engage in renegotiation of the oil contracts/ better contract administration but it now maintains that the deal must not be changed for varying reasons.

Given the negative feedback from the Guyanese populace, supported by independent international bodies, Ram believes the AG should make a case for renegotiation.

He said, “As a lawyer, he should use all his talent and the resources at his disposal to make the case for re-negotiation of the 2016 Agreement. And as a citizen, he should join his fellow citizens to make that happen.”

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• Anil Nandlall, Attorney General, Attorney-at-Law, Christopher Ram, oil, S.C.

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