There was a recent headline that “VP Jagdeo flexes government’s muscles on future oil sector profit sharing.” According to an August 17 Reuters news report, “the PPP administration has again signaled its intention to move to revise the existing contractual terms that obtain in respect of royalties, as part of a new Production Sharing Agreement (PSA) for future crude and gas projects.” Jagdeo is quoted in the Reuters report as saying that any new PSA will be tougher than the previous one negotiated by the Granger administration with ExxonMobil and that all of the deficiencies in the present agreement will be addressed. Jagdeo is further quoted as saying a new PSA could be ready “within six months.” The Attorney General, Mr. Nandlall, apparently had made similar comments at a recent New York meeting. In a letter of July 6, 2021 to a local newspaper, Mike Persaud of OGGN had asked the AG to indicate what oil blocks do not have an already signed PSA. The AG who usually likes to set the record straight has not responded, nor has the VP or Minister of Natural Resources responded.
We applaud the PPP government’s “engine room” embracing the notion of a “good contract” to give the bulk of the benefits to Guyana, not foreign exploiters. However, the time to act is now, starting with the lucrative, “sweet” Stabroek Block with an estimated 13 billion barrels of oil. While the oil companies have made billions, Guyana has less than US$400 million and a long list of needs. We need urgent action now, not a pie in the sky promises of some future action. OGGN’s research shows there are nine PSAs or prospecting license already signed – 7 signed by the PPP during the President Ramotar’s administration and 3 signed by the PNC (one of the three is an amended contract previously signed by Mr. Ramotar). The seven contracts apparently signed by Mr. Ramotar are Berbice – 2013; Canje – 2015; Corentyne – 2012; Demerara – 2013; Kaieteur – 2015, 2 weeks before the election; Roraima – 2013; and the Original Kanuku – 2013. Three contracts were signed by Mr. Trotman (Orinduik and Stabroek – 2016), and an Amended Kanuku contract previously signed by Mr. Ramotar, signed by Mr. Trotman on May 2016. The PPP signed more bad contracts (7) than the PNC (3). So what PSAs are Mr. Jagdeo and Nandlall referring to that will be renegotiated? Will the VP’s gas-to-shore project at Wales be under a different, better contract? Will this go to Parliament and be disclosed to the nation for review?
The Global Witness report which the PPP relied on heavily during the election to say that Guyana would lose an estimated $US55 billion on 8 billion barrels of oil, had also strongly advised that the Government use the approval of the Payara Environmental Permit as a strategic leverage point to renegotiate the Stabroek contract. Instead, the Government ignored all advice, fired the EPA head, installed a replacement and accelerated the approval of the Payara permit. So, when our government knowingly and willingly facilitated this kind of exploitation of the nation’s resources, the nation is curious to know which PSAs the VP would be flexing muscles to re-negotiate! The nation awaits with bated breath to hear the VP or AG’s response.
