The word “Re-negotiation” as in “Re-negotiation of the Oil Contract” seems to be a loaded word. So, avoid using that dreaded word. Ask the oil company for a sit-down meeting and say simply, “Can we improve some of the terms of the Contract?
Editor, I have read a letter in yesterday’s SN by Darsh Khusial, director of OGGN in which he stated that (former) EPA head Vincent Adams had indeed gotten a major amendment to the Contract. Dr Adams had had talks with the Oil Company and got them to agree to provide “unlimited insurance liability” to cover damage from an oil spill. That is a huge improvement in Guyana’s favour.
Another sentence of that letter: “Dr Adams noted in the [KN radio] interview that Exxon will consider reasonable requests if asked”.
Editor, is it possible for your paper to ascertain whether the GoG has ever asked the oil company for improvements in the financial terms of the contract, namely, an increase in the 2% royalty and the 12.5% profit sharing?
Permit me to share this table making comparisons with the Suriname’s Oil Contract:
• Note: Suriname’s Cost Recovery is set at 60% of revenues, leaving 40% for profit sharing. Guyana’s Cost Recovery is set at 75%, leaving a paltry 25% for profit sharing.
Dr Jan Mangal once said that the relationship between the host country and the Oil Company is like a good marriage. It seems to me that both Dr Adams and Dr Mangal are optimistic that “Exxon will consider reasonable requests if asked”. Has the GoG asked?
Final point. I watched an interview of VP Jagdeo a few weeks ago with Kiana Wilburg on KN radio. Mr. Jagdeo explained in crystal clear terms how the absence of ring-fencing can be an invitation for the oil company to manipulate expenses between oil wells and/or oil fields to cheat Guyana out of a fair share of oil revenues. Would Mr. Jagdeo not agree to ask the oil company to review the contract’s ring-fencing provisions?
Yours faithfully,
Mike Persaud
