Dear Editor,
The key paragraph from the Natural Resources Ministry (SN May 13) press release says:
“[Regarding] the contractual arrangements with ExxonMobil, it is reiterated that the APNU+AFC government on taking office met an agreement that was signed in 1999, and based on advice received, chose not to make any fundamental changes and disclosures to, and about, the agreement and to respect its terms”.
Can the public know what non-fundamental changes, if any, were made? The press release also says, “on advice received,” there will be no disclosures of the contract. This is a very stunning statement. On a matter concerning the exploitation of the nation’s natural resources, namely, turning these resources into cash, the people of this country will have no clue as to the formula of sharing the cash.
What percentage goes to ExxonMobil? What percentage goes to the Guyanese people? This smacks of a long past era when colonial powers and foreign companies could literally take your resources for a song.
These oil resources are the patrimony of the people; their representatives sit in the parliament. If this contract cannot be made public for whatever reason, then at least it should be revealed to the people’s representatives in the parliament. I am reminded of president Jagdeo entering into deals with companies involving our forest lands, and the people’s representatives had absolutely no information on those deals.
Now we are faced with the GoG/ExxonMobil contract, and this nation again wonders what could be the secret deal to justify withholding details of the contract from the parliament? The people of Indonesia today are up-in-arms against foreign companies (including ExxonMobil) currently exploiting that nation’s mineral resources.
The details of the contracts were never revealed or approved by the Congress of Indonesia. Congressmen in Indonesia are calling on the foreign companies to pack up and leave. Let us not repeat the experience of Indonesia in Guyana. For more details, check out this link, NYT 3/31/17, https://www. nytimes. com/2017/03/31/business/ energy-environment/indonesia-gold-mine-grasberg-freeport-mcmoran.html?_
From Steve Coll’s book on ExxonMobil, we learn that there are several different formulae on splitting the proceeds from oil:
Page 201, “With Raymond (former CEO) behind him, Nelson (country rep.) pressed for deal terms that would produce returns for ExxonMobil of more than 16% on capital invested”. (This quote talks about one of the many ways of sharing the proceeds between ExxonMobil and Saudi Arabia).
Page 159: “CHAD would receive a 12.5 percent royalty on all oil produced, plus taxes equal to 50 percent of the consortium’s net profits, which could rise to 60 percent if world oil prices soared. Chad’s take of less than two-thirds of revenue after expenses compared to rates closer to 90 percent in Nigeria”.
So there are several different formulae of sharing returns between ExxonMobil and a host country. Which one applies to Guyana? The Guyanese people and especially their representatives in the parliament deserve better than a total blackout on information concerning their patrimony.
Yours faithfully,
Mike Persaud
