Jagdeo shuts down calls for renegotiation of Exxon contract 

Aug 01, 2025 News

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…calls other parties promise to change contract a ‘bluff’

Kaieteur News – General Secretary of the People’s Progressive Party/Civic (PPP/C), Bharrat Jagdeo, has reiterated his party’s position that there will be no renegotiation of the Stabroek Block Production Sharing Agreement (PSA) with ExxonMobil.

His remarks come in response to commitments from opposition parties A Partnership for National Unity (APNU), Alliance For Change (AFC), and We Invest in Nationhood (WIN), who are promising on the campaign trail to engage ExxonMobil Guyana Limited (EMGL) for better terms if elected after the September 1 general elections.

On Thursday Jagdeo was asked for the PPP’s current stance. He dismissed the opposition’s pledges as a political bluff. “So, you said on the campaign trail, they are promising renegotiation. So APNU has danced around this issue their whole lives, APNU and AFC, they have danced around the issue,” Jagdeo noted.

He said that Exxon has made it clear that it will not agree to any renegotiation of the 2016 contract. Moreover, he explained that the PSA includes a stabilisation clause which prevents the government from unilaterally altering the contract terms without financial consequences. “Exxon has already said no, so you can’t have mutual agreement any longer for renegotiation, so that means unilateral change to the agreement and if you change unilaterally, there is a stability clause to say it must not affect them adversely, so we have to compensate them.”

He challenged the opposition to explain how they intend to address these hurdles if Exxon maintains its position. “Those two questions will give you all the answers you need, and then you will see who is messing around with the people of this country we don’t do that. We tell them, honestly, what we can do and what we can’t do, and they [APNU + AFC] left us with this, this useless contract you… If you ignore those two things, then you’re just bull@&$ people,” Jagdeo said.

The PPP General Secretary acknowledged that while his party “wishes” they could renegotiate the deal, the stabilisation clause and Exxon’s refusal leave no room to do so. Instead, he said, the government has sought to balance the agreement’s shortcomings through other initiatives. “At the end of the day, you can’t even succeed, because any international arbitration will say the government voluntarily, willingly sign on to these clauses. Nobody held a gun to their head,” the Vice President added.

He cited the Local Content Law, revised petroleum regulations, the gas-to-energy project, and a new model PSA with improved fiscal terms as the government’s efforts to improve the oil sector framework. However, it should be noted that the new PSA does not apply to the Stabroek Block contract. “They just, oh, negotiate, renegotiate, and they are lying to the people of the country,” Jagdeo stated. Jagdeo further urged reporters to ask the opposition parties directly if they are prepared to unilaterally alter the contract in defiance of Exxon’s stance.

Agreement

The 2016 PSA stipulates that the Minister responsible for petroleum must pay the equivalent of the companies’ income tax to the Guyana Revenue Authority (GRA) on their behalf. Under the agreement, up to 75 per cent of oil production is used to recover costs, the remaining 25 per cent is considered profit and is split equally between Guyana and the consortium, giving each 12.5 per cent. However, the consortium pays a 2 per cent royalty from its share to Guyana. From Guyana’s 14.5 per cent total take, the government must pay the oil companies’ taxes.

Article 32 of the Exxon contract, which lists out conditions for ‘Stability of the Agreement’ states at 32.1 that, ‘Except as may be expressly provided herein, the Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement without the prior written consent of Contractor.”

The agreement goes on to say at 32.2 that “after the signing of this agreement and in conformance with Article 15, the Government shall not increase the economic burdens of Contractor under this Agreement by applying to this Agreement or the operations conducted there under any increase of or any new petroleum related fiscal obligation, including but not limited to, any new taxes whatsoever, any new royalty, duties, fees, charges, value-added tax (VAT) or other imposts.”

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• Bharrat Jagdeo, Exxon Contract, PSA, renegotiation, Stabroek Block

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