Govt. must urgently engage Exxon to get the best deal for Guyana – Opposition

Mar 11, 2024 News

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…says VP Jagdeo can kickstart discussion with his new PSA

Kaieteur News – Vice President, Bharrat Jagdeo’s challenge for “anyone” to draft a plan for renegotiation of the ExxonMobil oil contract, using conditions he has set, shows he has no intention to defend the interests of Guyanese.

This is according to the Office of the Leader of the Opposition. In a letter to this newspaper, the Opposition said, “We noted that VP Jagdeo issued a challenge to the Opposition to draft a renegotiation plan. This plan, he told reporters at his Press Conference, must consider, as he described it, the “constraining factors” of Net Zero and the decline in funding for fossil fuel related investments globally.”

The political group reminded the Vice President that it was the People’s Progressive Party (PPP) administration that crafted a new Production Sharing Agreement (PSA) only last year that requires oil companies to pay higher royalty, corporate taxes and other new fiscal terms “which apparently encountered no difficulties with those same Net Zero and funding constraints.”

To this end, the Opposition reasoned that if the Vice President genuinely wanted to improve the Stabroek Block deal, he would simply use the terms of the new PSA as a foundation of its renegotiation strategy. More importantly, the Opposition pointed out that what Jagdeo sees as constraining factors are in fact imperatives or compelling reasons for government to urgently engage Exxon and its co-venturers, Hess and CNOOC to get the best deal for Guyana, while not jeopardizing their ability to earn a profit.

“If, as projected, the push to Net Zero would gradually reduce demand for oil in the future, then, for us, that should compel the government to seek a greater share of revenues now for the benefit of present and future generations,” the group underscored.

Consequently, the Opposition noted, “Let’s therefore call Jagdeo’s challenge for what it is: an attempt to deflect attention from the fact that he has no intention to defend the interests of the people of Guyana.”

According to the political group, it has already pledged to invite the oil companies to the table to discuss getting more revenues for Guyanese from the country’s petroleum resources, after it assumes government in 2025.

It added, “There are several ways to effectively garner greater income, with ring-fencing being just one possibility.” On Sunday, Kaieteur News reported that VP Jagdeo said anyone can submit plans on how the government can renegotiate Guyana’s oil contract once they stick to the conditions that have been outlined by him. While responding to a question from this newspaper at his weekly press conference on Thursday at Freedom House in Georgetown, he explained, “The offer to renegotiate Guyana’s oil contracts is open to anyone who can come up with the plan to do so once they stick to the conditions set”.

He went on to list the conditions, “That we don’t lose momentum, let me go through it again… so no litigation that will stop the development of future projects that’s one. Two, that the window that we have through net zero…be taken into account and there are a couple of other conditions.”

Jagdeo at his February 29, 2024 press conference, challenged Opposition Leader, Aubrey Norton and his ‘secret’ oil and gas advisors to draft a “sensible” renegotiation plan for the lopsided Stabroek Block oil contract. Kaieteur News had asked the Vice President if he will support Norton’s oil and gas advisors if they devise a strategy to renegotiate the Stabroek Block deal. Jagdeo responded, “Let him come with a strategy and then I will speak about it” while noting that such a strategy would receive his support if the plan is sensible.

“If it is a clownish strategy don’t expect me to support it, if it’s sensible and it takes all the variables into consideration…” Jagdeo said. The first variable is that “Net Zero” can be a “constraining factor” for the future of oil and gas. Net zero refers to the balance between the amount of greenhouse gas (GHG) that’s produced and the amount that’s removed from the atmosphere.

According to Jagdeo, Net Zero is a global reality. “…Every country speaks about it, every country in the world speaks about it, Saudi Arabia speaks about it, UAE, Qatar and we in Guyana behave as though that doesn’t exist, that variable, which is a constraining factor for the future,” the Vice President told Kaieteur News.

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• Contract, Net Zero, oil, opposition, renegotiation

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