Today’s front page story in SN showing Minister Bharrat handing over production license for a fourth oil well to Exxon’s Guyana president Alistair Routledge, giving up yet more leverages to demand renegotiation – should give cause for alarm to the Guyanese people. It is simply giving Exxon license to cheat the Guyanese people of Fair Value for their Oil Resource. I support the idea of all oil countries increasing production to fill the shortfall created by the urgent need to stop importing oil from Russia. A higher call to pressure Russia to abide by a rules-based world order, specifically that no country can invade another. No nation, including Russia, needs a buffer. And, Russia, a nuclear-armed nation even more so, does not need a buffer. Not from any nation or a group of nations called NATO.
This presents a golden opportunity to renegotiate and make right a lopsided contract signed under strange circumstances with Exxon in 2016. That contract contains a clause (so-called “Stability Clause”) that nullifies the powers of Guyana’s parliament. That contract also gives Guyana a 2% royalty and waives corporate income tax on Oil Companies for the life of the contract. Suriname gets a 6.25% royalty, profits’ tax and profit share. It is an insult to the Guyanese people to be stuck with this contract for the next 30- or more years. Guyana is not getting Fair Value for its crude. Simply put, the GoG by refusing to renegotiate, is collaborating with Exxon to rip-off the Guyanese people of billions of dollars. On the Royalty item alone on 9 billion barrels, Guyana loses $25 billion [9bb times 4.25% (6.25% minus 2%) times Av price $75].
Supporters of GoG (attorney Fuad Rahaman and several others) have backed the gov’t’s position of no-renegotiation using a spurious and false argument. President Ali states it like this recently in UAE: “We came to office and found a signed agreement” and therefore we are duty-bound or politically bound to uphold that Agreement. Fuad goes further, says “Jagdeo learned from past mistakes”, and the lesson learned is that he must not ask for renegotiation. These are all false and suspicious excuses for choosing to collude with Exxon. There is no political exigency that compels Guyana to choose not to renegotiate. The contract itself specifies that it can be renegotiated providing both parties agree to do so. Mr. Jagdeo refuses to make the case for renegotiation. Even though he has pointed out the egregious unfairness of the contract many times. A political leader promising to renegotiate in an election campaign, but after winning and taking office, makes excuses to go along with the Contract, is indeed acting funny.
