‘It’s foolish to think Exxon lopsided deal was made better with local content law’

Oct 20, 2024 News

Kaieteur News- Economist and advisor to the People’s Nation Congress Reform (PNCR) on oil and gas Elson Low told the Kaieteur News in an invited comment, that it would be foolish of the government to think that the lopsided 2016 Production Sharing Agreement (PSA) governing the lucrative Stabroek Block offshore Guyana was improved by the Local Content Act and the Gas to Energy project, saying that both would have existed even if the oil contract terms of itself were made better.

Economist and Advisor to the PNCR, Elson Low.

“Is Jagdeo really peddling the notion that if the Stabroek PSA were improved Guyanese could not be involved in any local content opportunities? That’s ridiculous as a wide range of countries have local content provisions. Additionally, the Gas to Energy project is not the brainchild of Jagdeo, but the Coalition government began preparation for that project. Is he saying that having witnessed the Coalition’s good work he abandoned any plans to renegotiate?” Low questioned.

Reminding citizens that pre-elections the People’s Progressive Party (PPP) made a commitment to renegotiate the contract he also highlighted that Guyanese should not allow the Vice president (VP) to “confuse the nation about the Gas to Energy Plant.”

He argued that no matter what improvements are made to the contract efforts would still have been made to make use of the country’s natural gas resources for the production of electricity and other products. “That is totally separate from the question of improving the Stabroek PSA,” Low said.

At a recent press conference, the VP while admitting that neighbouring Suriname has better fiscal terms than Guyana said that the former administration is to be blamed for the lopsided 2016 oil deal. He boasted that his government fixed the deal by addressing the non-fiscal terms so that Guyanese can benefit more from the sector.

“We sought to fix this by getting more benefits from the contract through the Local Content Law, the Gas-to-Energy project so that we can claim other non-fiscal benefits from the contract and we have had Exxon agree with that from the time we got into office, but this is great and I am happy for Suriname, very happy for them they have worked very hard at this,” he reasoned.

• Economist, gas-to-energy, Guyana, Jagdeo, opposition