Exxon oil contract a legalized form of highway banditry – Glenn Lall tells Financial Times

Jun 26, 2024 News

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…Routledge dismisses Publisher as political aspirant

Kaieteur News – “The oil agreement we have is a legalized form of highway banditry.” This avid description of the 2016 Production Sharing Agreement (PSA) was made by Publisher of Kaieteur News, Mr. Glenn Lall during an interview with one of the largest media outlets in the United States, the Financial Times.

In an article released on Tuesday, the Financial Times reported that Lall has criticized both the government and Opposition for mismanaging the relationship with the oil companies and argued that the Guyanese are getting “chicken feed”.

Lall also noted that Exxon, the oil industry and the government are increasingly acting in concert to stymie criticism, including by hiring several Kaieteur News journalists.

Meanwhile, President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge told the Financial Times that Lall’s activism was hinged on his political aspirations. According to the Financial Times, Routledge dismissed Lall as a constant critic with political ambitions and “an axe to grind”, adding that “this is a competitive contract that is bringing investment into the country.”

The Publisher in response to the comments made by Routledge argued that as a citizen of Guyana, he is entitled to not only speak in defence of his country, but pursue any career he desires.

“I find Routledge’s statement about me very rude and disrespectful. As a citizen of this country, I am entitled to pursue any career or say and do anything I so choose to do. Whether I want to enter politics or not, it’s my prerogative,” Lall asserted.

He believes that ExxonMobil is threatened that the lopsided oil deal will be subjected to a complete overhaul, while other acts of mismanagement will not be tolerated under his stewardship.

Lall added, “But let me say this, had he and his company given this country a fair deal, he would have been happy to talk to the Financial Times about what Guyana is receiving rather than push his mouth in the domestic affairs of who is aspiring to be political leaders. Mr. Routledge and his company know that if there is any change in this country, that wholesale thievery going on will come to a full stop the next day.”

Further, Lall questioned whether any decent and patriotic leader would sit quietly and allow the sector to be mismanaged. “Any patriotic leader would allow Exxon to pump oil without their own meters? Any true leader would allow those projects to be approved without ring-fencing? Would allow them to invest without capping the interest rates? Would continue giving them projects without demanding taxes? Would any government allow a project to be approved without full protection from an oil spill? No decent leader of any nation on earth would sit down and allow the exploitation of its people in this manner,” the newspaper Publisher reasoned.

Notably, the Financial Times report also captured remarks from President Irfaan Ali who acknowledged that the deal is “skewed in favour” of Exxon. Be that as it may, the President was adamant that renegotiation of the contract can have legal ramifications that can prove fatal to the burgeoning petroleum industry in Guyana.

“The size of Exxon, in terms of the economy, tells you that you just couldn’t change the contract…it would have legal implications and the entire sector would have been held up,” Ali told the foreign news entity.

Additionally, Opposition Leader, Aubrey Norton told the Financial Times, “We need to get more out of these oil resources…within the first 100 days, we will pursue and engage with Exxon to ensure the people of Guyana benefit.”

ExxonMobil is the operator of Guyana’s oil rich Stabroek Block where over 11 billion barrels of oil have been discovered since 2015. Exxon and its partners, Hess and CNOOC pays no taxes to Guyana and enjoys an early recovery of investments through the provisions of the deal. The contract allows for 75% of monthly revenues to be deducted for costs, while the remaining 25% is shared with Guyana as profits. The country receives an additional 2% royalty on all petroleum produced and sold.

Citizens have been protesting for a more favourable oil deal, especially in light of the vast developments in the Stabroek Block. It should be noted that when the deal was signed, Exxon had discovered a mere 3 billion barrels of oil. The country’s reserves have however grown to more than 11 billion barrels, which experts argue, justify changes to the arrangement.

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• banditry, Financial Times, Lall, political, Routledge

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