Guyana was warned 37 years ago about dangers of signing lopsided oil contracts

Jan 01, 2024 ExxonMobil, News, Oil & Gas

– They “blow up in your face sooner or later”- Former Deputy Prime Minister Mr. Haslyn Parris

Kaieteur News – Can you fathom the revelation that a distinguished Guyanese politician had vehemently cautioned over three decades ago against entering agreements like the egregiously imbalanced 2016 Stabroek Block Production Sharing Agreement (PSA)? This is no mere hearsay.

Chartered Accountant and Attorney-at-Law, Christopher Ram recently unearthed compelling evidence affirming that Guyana’ s former Deputy Prime Minister, Mr. Haslyn Parris, fervently advocated against entrapment in such disadvantageous contracts, while recognizing the need for renegotiation in the face of such exploitative arrangements.

In an interview with this publication, Ram cited the robust parliamentary contributions of the late Haslyn Parris, who astutely shepherded the Petroleum Exploration and Production Act of 1986, now superseded by the Petroleum Activities Law of 2023. Ram drew attention to the Hansard of April 14, 1986.

This is what Parris said: “If in any negotiation between two people, either of them, arranges to use the strength in relation in the other one in such a way that you lock a man into an agreement, or you force an agreement that is simply untenable in terms of the pressure which you bring to bear on that person, then you can bet your bottom dollar that that agreement is going to blow up in your face sooner or later, and it will be a non-agreement by virtue of the inequity inherent in the agreement.

“So therefore, we have a concern to derive terms that will help ensure that the agreement reach reflects the relationship between both sides, which will ensure, which will not come under the pressure of inequity born, simply on inadequate negotiating strength.”

Ram said Parris’ words still hold true to this day. The lawyer also rhetorically asked whether any member of the PPP/C government has ever sought out that critically important historical record. Applying the logic and meaning of the former Guyana scholar, statistician and economist, Ram said the Stabroek Block deal, first signed in 1999, then renegotiated and made worse in 2016, constitutes a non-agreement. He said this is by virtue of the inequity of the terms. Further noting the universal dissatisfaction with the agreement, Ram said this is exactly what Parris meant when he said that any such agreement “will sooner or later blow up in our faces.”

Furthermore, Ram said if Vice President, Dr. Bharrat Jagdeo had read the memo written by Commissioner of the Guyana Geology and Mines Commission (GGMC), Newell Dennison after he was roughed up by Exxon executives months before the 2016 Agreement, or the Clyde & Co report on the circumstances leading up to the signing of that lopsided deal, he would be complimentary of Parris’ wisdom.

The Guyana Government has insisted that it will not renegotiate the Stabroek Block deal, even as it has acknowledged that it leaves Exxon with the lion’s share of resources while Guyana gets the proverbial crumbs. It has maintained this position even though Ram and many other local advocates have appealed for major loopholes for revenue loss to be closed.

Most recently, Ram renewed calls for Stabroek Block projects to be ring-fenced, meaning, each pays for itself. Ram has said there is no need for a renegotiation for this to be achieved. The government only has to insist that this is a binding term for the production licences of Exxon’s future projects. In the absence of doing so, Ram explained that Guyana sets itself at two disadvantages:

1) it defers oil profits it is entitled to receive today, to fund Exxon’s exploration and production programmes instead, and,

2) it becomes a de facto investor with no voice at the table or say in decision making in the Stabroek Block.

The Guyana Government has sadly maintained that it will do nothing; it will continue to grant ExxonMobil approvals for more projects, armed with the same onerous terms.

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Commissioner of the Guyana Geology and Mines Commission (GGMC), contracts, Dr. Bharrat Jagdeo, Newell Dennison, Vice President

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