The opposition People’s Progressive Party/Civic (PPP/C) is open to discussing the Production Sharing Agreement (PSA) signed between government and ExxonMobil, according to leader Bharrat Jagdeo in order to ensure a bipartisan approach towards a possible renegotiation.
However, Jagdeo was quick to point out that while any contract negotiated between a sovereign country and a party can see renegotiations, it is best determined on the mutual acceptance of both sides.
“Anything that any sovereign government negotiates with another party could be renegotiated if the other party agrees to come to the table. It can be done amicably. If it pursues it and the other party does not agree, you end up in a dispute. In this circumstance, I believe that the amicable position is the best one,” he said.
“Assuming they [government] review [the contract]… and they want to approach in a bipartisan manner, we will be willing to meet with them to talk about it,” he added.
However, Jagdeo said the PPP/C was not mulling tabling a motion to have the contract renegotiated, although it views it as a “horrible and incompetently negotiated one.” He said the PPP/C respects investors and would not want to be seen as a party that stymies investment opportunities here.
However, if government were to table a motion of its own for the renegotiation of the PSA, the PPP/C would support it if it determines there would be better terms for the country.
“If the government comes with a motion of that nature, once the motion is in defence of Guyanese…ExxonMobil has to do what’s best for its shareholders, and anything that I see that will bring greater benefits to my country, my people, then we will support it. That is a general position,” he said.
“Any motion that would support the interest of Guyanese people, I made that clear, that would see them getting wealthier, better off etcetera, in the long run, using oil resources or any other resources,you can count on the PPP’s support for that,” he added.
Despite noting that there is “no prospect” at this time for a review of the controversial PSA between the government and ExxonMobil, President David Granger pointed out on Wednesday that that the matter is engaging the attention of Cabinet.
“These matters are before Cabinet and it depends on what determination Cabinet arrives at but the contract is an agreement between two parties and these things have to be approached very carefully. There is no prospect at the present time that it is the intention of Cabinet to review it but as I said it is before Cabinet,” he told reporters on after being asked whether government is prepared to review the contract.
Since the PSA was released late last year, government has faced criticism, particularly over the US$18 million signature bonus it received and the 2% royalty and members of civil society have called for a review of the contract.
Aside from the signature bonus, Government also boasted that it was able to introduce a two percent royalty on gross production under the modified contract, an increase in annual rental fees, from US$240,000 to US$1 million, an increase in training funding from US$45,000 to US$300,000 per annum and a new allocation of US$300,000 for social and environmental programmes.
For ExxonMobil, a ten-year agreement, which was scheduled to be up in 2018, was extended and the tax regime remains the same as in 1999 where it would not pay VAT, excise tax or duties on its operations.
The company can also export all petroleum to which it is entitled free of any duty, tax or other financial impost and can receive and retain abroad all proceeds from the sale of such petroleum among many other benefits.
An IMF team in a November, 2017 report had said that ExxonMobil got a generous agreement from Guyana and that loopholes exist in the agreement which could see the country losing out on revenue.
But Minister of Natural Resources Raphael Trotman has defended the agreement, saying that the positives must be looked at and that government is pleased that it has secured a deal with a large and reputable company that has anchored interests and will not abandon this country while simultaneously generating needed revenue.