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‘Make do with what you get, spend it wisely’ – Former U.S. President Bill Clinton tells KNews Journalist when asked about Exxon deal
Former U.S. President, Bill Clinton
Kaieteur News – Guyana’s oil contract with United States (US) oil major, ExxonMobil has been widely criticised by reputable international agencies for extending sweet giveaways to the operator of the prolific Stabroek Block and its subcontractors while the nation receives a meagre share of its wealth.
The Production Sharing Agreement (PSA) signed with ExxonMobil back in 2016 authorises the deduction of 75% of the monthly revenue by the company to recover costs. The remaining 25% is then split with Guyana, meaning the country receives 12.5% of the profits. Exxon also pays a paltry 2% royalty to the country, when the global industry norm is 10%. Exxon and its subcontractors are also exempted from tax payments under the agreement but are still issued with receipts stating they have paid these costs to Guyana in order to avoid facing taxes in the US.
Given the injustices of the Petroleum Agreement, former deputy comptroller for the State of New York, Tom Sanzillo issued a number of reports and reviews on the giveaway deal Guyana signed with Exxon, urging the country to plug the existing loopholes in the contract.
On his inaugural visit to Guyana, Former US President Bill Clinton was asked to give his views on the oil deal with the American petro-giant. In an exclusive interview with this newspaper on the sidelines of an event at the Arthur Chung Conference Centre, Liliendaal, Georgetown on Tuesday, the former Head of State said the country’s oil deal is a “beginning” and the revenue streams should be spent wisely.
He was asked to share his thoughts on Guyana’s oil contract when he said, “Well, it depends on what they do with it; it depends on what else they do with their energy wealth. I think the President’s got a pretty good handle on what he’s trying to do and this is a beginning for you. I think you should ask me in two/three years whether you struck the right balance. I am inclined to think he’s gonna do good things.”
Only on Tuesday, Kaieteur News reported that the President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge was grilled by the BBC on the lopsided oil contract it signed with this country, robbing it of its natural resources. Oil was discovered by ExxonMobil in 2015 but production activities commenced in 2019. Since oil production began, ExxonMobil deducted over US$19B from the country’s oil to cover its investments. In the meantime, the Bank of Guyana statistics indicate that the nation has only received approximately US$3.5B, as at December 5, 2023.
The government has ignored calls for the agreement to be renegotiated with Exxon and has instead crafted a new model PSA that mandates higher royalties, sets a lower cost recovery ceiling and demands the payment of taxes by oil companies. It has said these fiscal terms, that will govern future discoveries made outside of the oil-rich Stabroek Block, are non-negotiable.
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