Latest update September 20th, 2026 10:40 AM
President Ali’s Al Jazeera interview
Dear Editor,
President Ali has once again invoked the term “Sanctity of Contract” as the main reason for his government’s decision not to renegotiate the Exxon-Guyana Production Sharing Agreement, signed in 2016 by the previous PNC government.
Articulating reasons for Re-N; Adopting a policy of a firm “No” to Re-N; Defending the PSA as a Fair Contract. These are three different and distinct policy positions. President Ali has choices, other than defending the PSA as a fair contract. [Officially Ali says his hands are tied by the “Sanctity” principle; unofficially his govt. is defending the PSA as a Fair Contract].
The current PSA provides for: 75% of revenues go to Cost Recovery; remaining 25% is split evenly between Oil Companies and Govt. of Guyana. I have two questions for President Ali. If the PSA had been a little different – – 90% for Cost Recovery and 10% to be split between OCs and GoG, would President Ali still invoke the term “Sanctity of Contract”?
Second question: The Guyanese people have learned recently (actually President Ali announced it) that Capex of $55 billion have been fully recovered. We have assumed that from here-on out into the future or until the Stabroek block’s reserve is depleted, Guyana’s share will be 39.8% of revenues (or 39.8 barrels out of every 100). For whatever reason, if Exxon moves to reduce Guyana’s share to below 39.8%, would President Ali still invoke the term “Sanctity of Contract” as his reason for doing nothing, assuming he will do nothing?
Note: (1) I am assuming Capex (Capital Outlays) and Operating Expenses are kept separately, not commingled; (2) If Capex for the first seven wells are paid out, then this is in effect Ring Fencing, except it is Ring Fencing applied to 7-wells. The OGGN group has been advocating for each project to be Ring Fenced. (Credit to Dr. Vincent Adams for Note #2).
Would President Ali or Minister Bharat’s Energy dept. offer some clarification to Notes #1 and #2 – by issuing a press release? Thank you.
Regards,
Michael Persaud
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