Latest update September 13th, 2026 10:36 AM
Gov’t cites ‘Stabilization Clause’ as excuse for not ring-fencing Stabroek Block projects
Kaieteur News- The Ministry of Natural Resources (MNR) in an attempt to evade calls for ring-fencing on Tuesday made the argument that the ‘Stability Clause’ in the Exxon oil deal prevents the Government of Guyana (GoG) from implementing such a provision.
The ministry was responding to an article published by Kaieteur News on May 9, 2025 under the headline, “7th oil project must not be approved without ring-fencing, other benefits – Dr. Adams.” In that article, the former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams also revealed that during the A Partnership for National Unity and Alliance For Change (APNU/AFC) tenure in office, the Coalition was actively pursuing a ring-fencing provision but these plans were abandoned when the new government took office in 2020.
The Stabroek Block
In response, the Ministry said it wholly rejected “this treacherous insult to the intelligence of Guyanese”. It reminded that it was the same Coalition government that signed the Stabroek Block Production Sharing Agreement (PSA) “in secret” and hid same from public scrutiny.
The GoG pointed out that after unrelenting calls, the agreement which did not feature a ring-fencing provision, was made public. Further, it explained, “It would be recalled that the contract also contains a Stabilisation Clause that prevents Guyana from increasing its fiscal take, unless the oil operator agrees to the same. If there are any arbitrary changes, that very clause emphatically states that ExxonMobil and its partners must be duly compensated for any economic loss they suffer at the hands of any new policy, regulation or law.”
While the government claims that the Stabilisation Clause presents a hurdle where ring-fencing is concerned, it should be noted that this provision would not affect the ‘profits’ of the operator. In fact, this mechanism is used to allow faster recovery of cost. By refusing to implement this provision, Guyana has agreed to ‘delay profits’ until all costs have been recovered by ExxonMobil.
Therefore, the implementation of this provision would in turn allow for only costs relating to a specific project to be recovered. In this manner, more profits would be available for both the government and the operator after those expenses are cleared.
No intention
Meanwhile, MNR shifted its attention to the former government’s intent to implement ring-fencing. It said, “Citizens would also recall that the APNU+AFC never intended to apply ring-fencing provisions to ExxonMobil’s contract, as Dr. Adams falsely claimed.”
The Ministry quoted a Kaieteur News article dated August 5, 2019 published with the headline “Energy dept. to demand more royalties, profit oil in future contracts.”
In that article, the former Head of the Energy Department, Dr. Mark Bynoe was asked whether the Model PSA will ensure that future deals signed with oil majors would feature a strict ring fencing provision to which Dr. Bynoe responded in the affirmative.
To this end, MNR said, “In its 2025 piece, Kaieteur News claimed it contacted Dr. Bynoe, who noted that the previous government was in talks with ExxonMobil on this issue. He is quoted as saying, “I think it was in its early stages of discussion.” It appears that Kaieteur News has a comprehension problem. Nothing in the quote it supposedly extracted, said anything about Exxon accepting ring-fencing being added as a provision to the Stabroek Block PSA.”
While MNR boldly accused Kaieteur News of a “comprehension problem” the same Ministry sadly failed to grasp that both of the quoted individuals in the recent article stated that talks were ongoing towards the implementation of a ring-fencing provision. It was never reported in the article that Exxon agreed to the provision.
The article explicitly states, “…the Coalition was actively pursuing a ring-fencing provision for the Stabroek Block.”
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- AFC, Dr. Adams, excuse, Ministry of Natural Resources, ring-fencing, stability clause, Stabroek Block
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