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The relinquishment provision

Dec 31, 2023 Editorial

Kaieteur News – The Stabroek Block was what was used over two decades ago to sell Guyanese into slavery.  When both the PPP/C and the APNU+AFC Coalition Governments should have laid down the law, they looked the other way, and allowed ExxonMobil to continue with its pillaging of Guyana. Government after government used a loophole in the law to let ExxonMobil off the hook. Guyanese now live with the failures of their governments, pay harsh prices for their incompetence, and what increasingly registers as their chronic and costly betrayals.

A standard provision in the law calls for a total of 75% of the Stabroek Block to be relinquished after 7 years, in increments of 50% after the first four years, 25% after the succeeding three.  The remaining 25% not subject to a production licence also has to be given back to Guyana (“ExxonMobil should have given up 20% of oil rich Stabroek Block December 10, 2023, but was allowed to hold on to the portion).  This should explain why ExxonMobil is in such a hurry to keep expanding its offshore footprint.  It is that so it can gobble up more and more acreage of the Stabroek Block under the authority of production licenses, which gives it the inviolable legal protection that is necessary.

The loophole in the law, as identified by Chartered Accountant Christopher Ram some time ago is the discretionary power given to the subject minister allowing for adjustment of the relinquishment arrangements.  It is a discretion that has been used most unwisely, heaping abject misery on Guyanese.  Ministers acting at the behest of their leaders and governments have done just that to the great disadvantage of Guyanese.  This began in 1999 when the then PPP/C Government under Janet Jagan first entered into agreement with ExxonMobil.  In 2012, it was worsened and continued by another PPP/C Government, on this occasion by former President Donald Ramotar.  In 2016, the APNU+AFC Coalition did the unbelievable and the highly unacceptable, via the 2016 post-discovery agreements and relinquishment provisions, with both former Minister Raphael Trotman and former President David Granger neck-deep in the abomination that is now this albatross that hangs over Guyanese heads.

Every barrel of oil that ExxonMobil drains from that block for its almost exclusive gain is an intolerable pain to every citizen of this country.

Let us look again at this gallery of Guyanese oil heroes.  From Janet Jagan to Donald Ramotar to David Granger (and certainly not ignoring the powerful role that behind-the-scenes, president Bharrat Jagdeo would have played), all of these national leaders have failed Guyanese by not standing up for what is best for Guyanese interests, by not adjusting or not touching in any manner the relinquishment arrangements embedded in the law.  In fact, it is accurate to assert that Guyana’s ministers and presidents have bent in the other direction where relinquishment provisions are concerned.  They have given ExxonMobil every concession with timing, as well as the percentage of the Stabroek Block to be given up.

Worse still, ExxonMobil has made its moves to tie up bigger and bigger swathes of offshore areas within the Stabroek Block under production agreements.  This effectively continues the plunder at will by the American oil company of Guyana’s oil wealth.  This has been with the fullest cooperation imaginable by past PPP/C Governments and the present one, and the APNU+AFC Government, as well.  More projects are waiting for approval and the issuance of production agreements, and already it is clear that ExxonMobil’s reign of robbery will go on unchecked.

ExxonMobil neutralizes relinquishment provisions by cleverly forcing the hands of our governments into production agreements.  And Governments of Guyana have been only too willing to sign on the dotted line, and give away for almost nothing all of our oil riches.  What ExxonMobil relinquishes in percentage, Guyana Governments have been glad to give right back to the oil company under production agreements.

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