Jagdeo will not give Guyanese a chance to vote on renegotiation of Exxon’s lopsided contract at elections

Oct 31, 2024 News

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Kaieteur News- Amid repeated calls by citizens and other stakeholders for a renegotiation of the lopsided ExxonMobil contract, which his government has stubbornly resisted, Vice President Bharrat Jagdeo who is also General Secretary of the ruling People’s Progressive Party (PPP) on Wednesday sought to rule out any move towards deciding the issue via a referendum at next year’s general elections.

A referendum is a general vote by the electorate on a single political question that has been referred to them for a direct decision. Jagdeo was asked the question by Journalist Denis Chabrol during his weekly news conference to which he said, political parties contesting the polls should state their positions on the matter and let the electorate decide if they want such a party to govern Guyana. Additionally, Jagdeo believes that conducting a referendum at the same time of the elections could complicate matters. A number of developed and developing countries all over the world have held referendums at the same time as national elections.  These include the United States.

Several papers on the subject suggest that the most obvious practical advantage of arranging the two events simultaneously is the considerable cost savings that can be made, since ballot papers can be distributed at the same time, the same voters’ lists can be used. Further, polling place personnel can be employed once instead of twice, voter information packages can be put together with information about both events and postage can be saved by sending it out only once. It is also plausible that holding simultaneous events would encourage governments and electoral bodies to harmonise legislation and procedures. Referendums enhanced democracy by giving voters greater opportunities for involvement.

Chabrol asked Jagdeo: “for instance in the Cayman Islands, they are putting to referendum alongside their upcoming elections whether they should be constructing piers to accommodate larger cruise ships. So I am just giving you that as a slight background so to speak, in light of the debate about the need to renegotiate the Exxon contract would your government or party be inclined to put that to a referendum as well?”

Jagdeo responded: “The referendum again, this is a matter that has to be discussed and debated on…this issue whether there would be a referendum so you get yes from the referendum…ummm…because Christopher did a suspect survey, nobody pays attention to these suspect surveys, so the referendum could yield this.”

He explained that as leader of the People’s Progressive Party Civic (PPP/C), he does not want to complicate the 2025 electoral process. According to him, there is also the belief that the opposition would go in favour of the referendum to complicate the process. “Citizens of Guyana are sensible enough to choose at the upcoming elections, the political party with a plan and they would be able to hear from them whether or not the party is in favour of renegotiation, and if it can actually be implemented.” Going back to the 2020 election period, he told reporters that his party was very clear that when they got into government, they would not renegotiate the contract and yet they got the support of all the citizens who voted for them because they are of the opinion that the PPP is a very serious party. He reasoned that “we showed that we can get more out of the contract that I explained in the past, we can get significantly more benefits for the people of this country. The gas-to-energy project alone is US$250M per year in savings to the population. The Local Content Law brings in US$700M of business to people not revenue and so we are getting more and we believe that we didn’t have to do this, it gets you caught up in a whole range of issues that can kill our momentum.”

The VP said it was not his party’s intention to have any of this happen and it did not affect the support received, therefore he believes the focus should be solely on the 2025 elections, as adding other aspects to the ballot given that there should be around 14-20 political parties contesting, will further complicate the entire process and this should be avoided. Noting too that he cannot make a decision on whether the issue could be taken to a referendum Jagdeo said: “anything on a particular matter has to be debated openly, not for the head of a political party or a member of the cabinet to pronounce on it just like that… on any issue… and it must be debated fully, and then if there is an appropriate time for that, that be done in the future,” he argued. “At the upcoming elections a government with a manifesto will be chosen and this choice is for the people to make on which political party they think is capable of keeping their promises and are serious to move Guyana forward. “Not because one country does a referendum on piers, we have to go down that route. So that’s what I am telling you as the head of a political party, I don’t want 2025 elections to be complicated with side roads,” Jagdeo argued.

New survey

The question on the referendum comes days after Chartered Accountant, Christopher Ram released findings of a survey which showed that an overwhelming number of Guyanese are in support of a renegotiated oil contract between the Government of Guyana (GoG) and American oil super major, ExxonMobil. Since the terms of the 2016 deal were made public, citizens have been calling on the government to engage the contractor for a renegotiation. These calls have however been shut down by politicians, with some even describing citizens as “low lives” for demanding more out of their resources. Ram in his column ‘Every Man, Woman and Child Must Become Oil-Minded’ published last Friday by Stabroek News said the recent survey provides compelling evidence that the Government’s “sanctity of contract” position is at odds with public sentiment. The survey, conducted by Ram and McRae, using the Google Forms platform attracted 135 responses from a diverse group of respondents including professionals, academics, students and citizens.

In revealing statistics associated with the survey, Ram explained, “An overwhelming 94% of respondents believe the Government should seek to amend the current Petroleum Agreement, with only 6% either opposed or unsure.”  The lawyer reasoned that this stark statistics alone should give pause to those who continue to defend the status quo of the lopsided oil deal. “The survey revealed that only 3.8% of respondents were satisfied with the existing provisions of the Agreement. The remaining 96.2% identified multiple areas requiring modification,” he added.

A whopping 83.2% of participants said they want the royalty rate revised while 79.4% called for changes to tax payment arrangements. Presently, Guyana receives 2% royalty from Exxon on all petroleum produced and sold, whereas Exxon and its contractors are not required to pay taxes.

To this end, the survey found that 66.4% seek modifications to tax certificates; 66.4% want the revenue guarantee revised and another 61.8% support ring-fencing provisions. The GoG has not implemented a ring-fencing provision to prevent Exxon from using revenue from one field to develop another. In this way, Guyana’s share of profits is significantly reduced until all costs have been recovered by Exxon and its Co-Venturers.

Obstacles to Change

The survey also delved into the views of the participants on what they consider as the key obstacles to renegotiation. A resounding 80.3% of the respondents cited the lack of political will, while 53% believe there is fear of potential economic repercussions. Ram and McRae’s survey also found that 44.7% of citizens believe diplomatic concerns are another humbug to renegotiation. Some 37.9% are of the view that legal government may be faced with legal constraints.  In his conclusion, Ram told readers of his weekly column, “The survey results paint a clear picture: there is strong public support for renegotiating the 2016 Petroleum Agreement. The current “sanctity of contract” stance by the Government which had promised to renegotiate the Agreement appears increasingly untenable in the face of such overwhelming public sentiment for change.”

(Jagdeo will not give Guyanese a chance to vote on renegotiation of Exxon’s lopsided contract at elections)

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• Bharrat Jagdeo, ExxonMobil contract, Journalist Denis Chabrol, People's Progressive Party

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