Unless there is renegotiation, Stabroek Block deal will continue to undermine Guyana’s sovereignty until 2057 - Chris Ram

Unless there is renegotiation, Stabroek Block deal will continue to undermine Guyana’s sovereignty until 2057 – Chris Ram

Dec 22, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – While Guyanese authorities have displayed an outstanding degree of courage in their efforts to thwart Venezuela’s plans to seize the Essequibo region, there is a document sitting right under their nose that undermines the nation’s sovereignty. That document is the Stabroek Block Production Sharing Agreement which Guyana and an ExxonMobil-led consortium signed onto in 2016.

Chartered Accountant, Chris Ram

Chartered Accountant and Attorney-at-Law, Christopher Ram recently pointed out in a column published in the Stabroek News that the PSA essentially strips Parliament, a key vessel of Guyana’s statehood, of its most essential power and function, and that is the power to “make laws for the peace, order and good government of Guyana.” (Article 65 of the Constitution).

“And how do we do it? By the burdensome stability clause contained in Article 32 of the 2016 Petroleum Agreement,” said Ram in his column.

Referencing the said clause, Ram said sub-Articles .1 and .2 state: “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.

It further notes, “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 imports.”

Ram pointed out that this state of affairs will not only be obtained for one year, five years or 10 years but until 2057. In a subsequent letter to the press where Ram cited the 2057 date, he noted that this includes the one-year extension that the former APNU+AFC Administration granted to Exxon to continue exploration of the block. Exxon was required to return 20 percent of the Stabroek Block to the State in October 2023 but had asked the former regime for an extension to October 2024, claiming that its exploration activities were interrupted by the COVID-19 pandemic.

Former President of Guyana, David Granger had granted the extension on the condition that a review would be done to determine the extent to which it was affected. When the PPPC administration assumed office, it said that review was done and it was satisfied that Exxon’s operations were affected. It therefore allowed Exxon to be granted the one-year extension to hold onto the block in its entirety.

Apart from that bland good faith statement, Ram told Kaieteur News that the PPPC has not said who did the review, the evidence provided by Exxon and who gave final clearance. According to Ram, “This is the shady nature of deals between the PPPC and Exxon in which everything is hidden from Guyanese, and everything further sweetens the already lopsided deal, making a mockery of the PPP/C’s 2020 elections pledge for better contract administration.”

Kaieteur News understands that Exxon is targeting at least 10 to 12 wells in the Stabroek Block next year to unlock more multi-million barrels of oil. Thus far, more than 11 billion barrels of oil equivalent resources have been discovered.