ExxonMobil contract can be renegotiated
Advisor to President David Granger on Petroleum, Dr. Jan Mangal, Wednesday said that the ExxonMobil production sharing agreement (PSA) with Government can be renegotiated. He added that zero taxes and two percent royalty in the current agreement is not the international norm.
Delivering a presentation on the Government of Guyana’s Vision for the Oil and Gas Sector at the University of Guyana, Dr. Mangal said that the current contract must be compared to what obtains internationally. Dr. Mangal is a Guyanese who has spent 18 years in the industry, 13 of them with Chevron working on major oil and gas projects in the United States, West Africa and Asia. He noted that contracts should always be reviewed as new information becomes available.“Contracts are always changed. A contract is an agreement between two people. Both parties need to be comfortable. If one party becomes really uncomfortable it will be changed,” Dr. Mangal pointed out. He said that Guyana is a sovereign country and the evidence around the world is that contracts can be renegotiated as the situation changes. “Look at the price for natural gas… people sign contracts for natural gas at a very high price. The price of gas has dropped internationally, people are renegotiating those contracts. A contract is an agreement and people need to be comfortable with it,” Dr. Mangal noted. He stated that the question of renegotiating the contract is one that the people of Guyana must answer. Asked whether he agrees with the feedback so far from the public that the contract should be renegotiated, Dr. Mangal said that the people of Guyana are doing a great job with the information which has been provided to the public. “I have a view on it. I am not at the stage yet where I am sharing that view publicly, but it is under discussion within Government,” Dr. Mangal stated. Dr. Mangal said that this discussion must continue. He noted that he will be preparing a white paper on the oil and gas sector for submission to President Granger, shortly. According to Dr. Mangal, the focus last year was to get the ExxonMobil contract released to the public. Dr. Mangal expressed his happiness that the information is out there and people are doing the analysis for themselves. (Kaieteur News)