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APNU pushes U.S support for bigger oil share for Guyana
Kaieteur News – A Partnership for National Unity (APNU) has made a call for the United States Government to support Guyana in securing a greater share of benefits from its oil resources, pushing back against caution from U.S Ambassador Nicole Theriot that renegotiating the country’s agreement with ExxonMobil could send a “terrible signal” to investors.”
APNU’s leader Aubrey Norton
At the party’s press conference on Friday, APNU’s Chairman, Aubrey Norton noted recent comments made by Ambassador Theriot of a push by the embassy here to eliminate double taxation for American companies operating in Guyana. The Ambassador had disclosed that the embassy has been receiving complaints from American companies operating in Guyana, that they are required to pay taxes twice – once in Guyana and then in the Unites States. Also, when asked if the U.S government supports a change to the contract Guyana has with ExxonMobil for the lucrative Stabroek Block, Theriot said renegotiating an already agreed contract could undermine investor confidence at a critical time for the country’s economic expansion.
US Ambassador to Guyana Nicole Theriot
For their part, Norton said, “We in the APNU appreciate the healthy relations Guyana enjoys with the United States and will keep those relations. However, we believe that our interests must also be promoted.” To this end, he noted that the negotiations should be for Guyana to get more benefits from its oil. “And the US must be supportive of such actions,” Norton said.
ExxonMobil Guyana Limited (EMGL) operates the Stabroek Block in partnership with Hess and CNOOC. The Stabroek Block is estimated to hold some 11.6 billion barrels of oil. Exxon and its partners Hess and CNOOC began pumping oil in December 2019, and today with four projects in operation, is producing close to a million barrels of oil daily.
The Production Sharing Agreement (PSA) for the Stabroek Block was signed in 2016 by the previous APNU+AFC Coalition government. 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.
There have been local debates over the 2016 PSA, and calls for the government to bring the oil major back to the table to renegotiate the contract. The People’s Progressive Party government has criticised the PSA but has maintained that it will not renegotiate the contract. Addressing concerns about whether Guyana is receiving a fair deal under the oil agreement, Theriot said while she is not in a position to assess the contract itself, the overall impact has been positive.
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