It is deceitful for ExxonMobil to compare 1999 contract with 2016
ExxonMobil has been unceasing in its efforts to delude the international community and even the citizenry into thinking that Guyana got a good deal. In fact, the company took to its Facebook page recently and made a comparison between the 1999 agreement and the one that was revised in 2016 by the David Granger-led administration.
In its comparison, Exxon points out that Guyana did not get a signing bonus in 1999, but it did in 2017. In 1999, the annual rental fee was USD 240,000 but it was increased to USD 1M per year in the 2016 contract. It noted that the annual training fee was USD 45,000 but it was increased to
USD 300,000 per year. It also tried to paint the contract as a “good deal” by stating that Guyana will get annual social environmental support to the tune of
USD 300,000 and two percent royalty.
In a recent interview on AlJazeera, Oil and Gas Academic, Chris Ram and Lisa Sachs, Director, Columbia Center on Sustainable Investment, agreed that not only is the comparison by ExxonMobil without merit but, that the 2016 oil and gas deal leaves Guyana catching crumby profits for the exploitation of its oil.
Sachs in particular was quick to note that the circumstances have changed entirely from 1999 to 2016. As such, the two should not be compared. In 1999, she said, there was a period of exploration and it was unknown what the quality of the resource was. In 2016, the citizenry now knows what it has, Sachs stated. “And so it is disingenuous of Exxon, frankly, to be making that comparison. What we should be looking at is whether the deal in 2016 is appropriate for the Government, and it is widely agreed and widely acknowledged that it is not. Guyana did not get a good deal. I would say, although somewhat controversial, I wouldn’t be afraid of having an honest conversation about whether this is a good deal and talking about how to rebalance the deal.”
Sachs added: “Investors and frankly the media always make governments scared of approaching that, but there are dozens, hundreds of renegotiations in the resource sector around the world, in developed countries, in the UK, in Canada, etc…”
Ram was in total agreement with Sachs. He also sought to clarify statements by ExxonMobil that it could have continued with the 1999 agreement, but it was government that requested to do an early review. Ram said that the public should be aware that ExxonMobil and its partners had no choice but to return to the table since the contract had expired.
Ram pointed out, too, that while ExxonMobil is busy trying to hoodwink the nation into believing that it gave Guyana a good deal, it fails to reveal that it inserted USD 460M in pre-contract costs into the deal which upon examination, seems inflated.
(Kaieteur News)