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Guyana's opposition party prepared to meet Government on ExxonMobil contract flaws




By Kaieter News

Petroleumworld 02 16 2018

The People's Progressive Party (PPP) said yesterday it is prepared to discuss the flaws of ExxonMobil Production Sharing Agreement (PSA) should Cabinet decide to move forward with renegotiating the deal through a bipartisan approach.

Opposition Leader, Bharrat Jagdeo, made the disclosure at his weekly press conference, a day after President David Granger announced that the 2016 PSA has engaged Cabinet.

“Assuming they review this contract and they have an approach on it and they want to approach it in a bipartisan manner, we would be willing to talk with [Government],” said Jagdeo.

The Opposition Leader was not willing to state support for renegotiating the contract citing political implications of Government accusing the PPP of being against foreign investors.

He said that two approaches can be taken once Government decides to renegotiate the contract. One is for an amicable route where both parties agree to renegotiate. The other approach ends in a dispute if one party does not agree to come back to the table.

“In this circumstance, I believe an amicable approach is the best suited one,” Jagdeo noted.

He stated that ExxonMobil has to do what is best for its shareholders, while the Government's team must seek the best for Guyanese.

Jagdeo stated that the government should first agree that there are elements of the contract that they could have done better on by admitting also that they did a bad job negotiating the contract.

According to Jagdeo, the problem is that Minister of Natural Resources, Raphael Trotman, has repeatedly made ‘asinine defenses' of the contract although Government incompetently sat at the table and was not prepared enough to negotiate the contract.

He repeated a previously held view that expertise was lacking on Guyana's side of the negotiating table, suggesting that Politicians should not be involved in the future management of the oil and gas sector.

“That is why we called for a nonpartisan approach. Take all the politicians out of the Petroleum Commission. Let's be arm length. The Petroleum Commission should be purely technically managed and that would be good for long term relations between the country and ExxonMobil,” Jagdeo noted.

He also noted that the PPP would support a Motion brought to the National Assembly which seeks to have the contract renegotiated.

“We were elected to defend Guyanese; nobody else, and Guyana's interest. The 800,000 or how many of us live in this country and those who live abroad too from the diaspora, we are elected to defend them. No one else! No company, nobody else and that would guide us on what is best for Guyanese and Guyana,” Jagdeo outlined.

On Wednesday, Granger stated that further decisions on the matter will depend on what Cabinet arrives at.

He further stated that the contract is an agreement between two parties and ‘these things' have to be approached very carefully.

Since the PSA was made public in December, there have been daily revelations in the media over clauses in the agreement that raise several burning questions relating to the offers ExxonMobil received, including 2% royalties, zero taxes on oil production, uncapped tax concessions on imports and the limited powers of related institutions and government agencies to effectively oversee Exxon's operations.

Social and political commentators have pointed to glaring flaws that led to the conclusion that Guyana got a poor, lopsided oil contract deal by international standards.

Story from Kaieter News
02 16 2018

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