If I were in the GoG, I’d insist Exxon sign the PCG letter agreeing to Full Liability Coverage. Sign the letter – and go on with your Oil Drilling. Observe Safety Rules. End of story. All oil drilling is done on a Wing and a Prayer. Hope an accident never happens – but if it does Exxon must be prepared to fulfill the terms of the PCG letter. That’s how it was in Exxon Valdez and Deepwater Horizon – the oil companies picked up the tab for all compensation and damages.
GoG has the wrong approach in dealing with Exxon. “I think of my oil revenues as the difference between life and death” – that’s GoG’s approach to Exxon. Exxon knows that – and will now play the GoG to the hilt – to get away with murder. It started at the moment the PPP took power in August 2000. Mr. Jagdeo declared the Contract cannot be renegotiated because of the fictions labelled, “Sanctity of Contract” and “Investor Confidence”. Mr. Jagdeo began defending the contract as something better than gold. This approach was mistake #1. Now AG Nandlall comes up with another – “Economic Disruption”. Again Exxon perceives the weaknesses of the govt. Mistake #2.
If the gov’t is willing to bat for Exxon, why would Exxon be willing to negotiate anything? Why would Exxon bring a spirit of compromise to the table? Why would Exxon come to the table at all? Mr. Jagdeo doesn’t have a good concept of Sovereignty and Independence of the country. He has already surrendered pieces of it to Exxon. Exxon now owns the country. Mr. Jagdeo has gleefully accepted 2% Royalty (Compared to Suriname’s 6.25%). Absence of Ring Fencing will ensure Guyana gets 14.5 barrels out of every 100 until all the reserves are depleted.
GoG has exposed its weakness – Exxon knows it – this spells humiliation of the Guyanese people.
GoG should step aside. Stop defending the contract. Do not appeal the Court ruling. Let the Court order go into effect. Rebuild the EPA as an Independent Agency. Has Exxon threatened to shut down oil drilling? Call its bluff. Not bluffing, let Exxon go. There are other oil giants standing in line to come in and do oil drilling on new Guyana’s terms.
Sincerely,
Mike Persaud
