Latest update January 6th, 2025 4:00 AM
AFC questions Govt’s fear of renegotiating oil contract
Kaieteur News– The Alliance for Change (AFC) on Friday questioned why the government of Guyana is afraid to formally request a renegotiation of the country’s lopsided contract with U.S. oil giant ExxonMobil.
At the party’s first press conference for 2025, former Head of the Environmental Protection Agency (EPA) and member of the AFC, Dr Vincent Adams, questioned the government’s fear to request the renegotiation of the 2016 Petroleum Sharing Agreement (PSA) in writing.
Former Head of the Environmental Protection Agency (EPA) and member of the Alliance for Change, Dr Vincent Adams
“Why is the Vice President and the President making excuses for not asking Exxon about renegotiation? What are they scared about? They’re talking about they’re going to renegotiate every contract except for Exxon,” Dr. Adams said.
Dr. Adams, who is a Petroleum Engineer by profession, said the contract states clearly that the government and Exxon make changes to the contract.
Article 13.2 of the PSA states that “This Agreement shall not be amended or modified in respect except by written agreement entered into by all the parties which shall state the date upon which the amendment or modifications shall become effective.”
He said that the only way the government can get Exxon to understand that it is serious about renegotiation of the contract is to formally write the oil company.
“What are they afraid of? To put it in writing? …Is this the kind of leadership that we want in this country? [Leaders] Who’s afraid to even approach an international company to ask for renegotiation for a better deal for its people?” he questioned.
On January 1, 2025, Kaieteur News reported that President Irfaan Ali during his end-of-year press conference said that he has no interest in writing ExxonMobil to renegotiate the lopsided PSA, signed by the previous administration.
He was at the time responding to a question from this newspaper on why his government still refuses to change the deal to seek greater benefits for Guyanese, even after altering multiple provisions of the contract.
To this end, the Head of State explained that the People’s Progressive Party has always been consistent in its position that the deal was “bad”. He however noted, “What we committed to was to respect the sanctity of contracts and that the international law, that has implications for us as a country. Other investors are looking on but what we said was that future PSAs would not have these fatal flaws and future PSAs would not have the type of lopsided arrangements that Exxon had, and we have made those adjustments to future PSAs.”
President Ali went on to point out that the market conditions must also be taken into consideration to ensure policies here do not drive away investment, but strikes a balance to still ensure the greatest benefit comes to Guyanese. In fact, the Head of State highlighted that Guyana has already seen benefits not only from the oil and gas sector, but from the expanded growth in the economy.
He cited initiatives such as the return of the school children’s cash grant which will soon be increased to $50,000; higher pension for senior citizens; a world class health care system that is currently being developed as well as an improved safe environment and education system.
To this end, Ali said, “(I can) show you how greater benefit is already coming to the Guyanese people, how the life of every single Guyanese is improving and you would know if you can tell me with straight face that even your own life is not improving, that you are not driving on better roads, that you are not saving time going to Region Three-imagine if you didn’t have the Crane by-pass road- that you are not going to benefit from the new four-lane bridge across the Demerara River that will be free of cost, if you are not benefitting from the $100,000 investment that we are making for every Guyanese above 18 years.”
(AFC questions Govt’s fear of renegotiating oil contract)
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