Since the discovery of oil in our territory in 2015, our media has been dominated by the news. Now it has boiled over bordering on what can be described as a controversy. The main reason for this is the agreement that the APNU+AFC regime signed with ExxonMobil. Without doubt that agreement is extremely skewed in favour of ExxonMobil. Guyana has signed an agreement that is being described by some as the worst in the world.
The issue that has people appalled is the fact that the regime signed the agreement when it had in its possession information on the huge find off our coast. So far, ExxonMobil has announced that their find is some three billion, two hundred million barrels of oil. They are still exploring.
Apart from ExxonMobil, some other companies are also exploring. It is, therefore, likely that the amount will be much more than what is already confirmed. Having had all this information and the opportunity to negotiate a production contract the administration has failed miserably. So much so that people are shocked at the quality of leadership we have. It appears that the best interest of our people is not the most important issue for this regime. However, even with that as a given, it is hard to comprehend why they signed such an agreement, without consulting even the experts that they have employed. I say this because Dr Mangal, a Guyanese expert, has voiced his opinion in relation to the royalty agreed to by Guyana. He said that the international norm is within the 10% to 20% range. We agreed for a 2% royalty. Clearly therefore, he was not consulted as to those terms.
People are very concerned. They have every right to be. After all, they have seen that this regime collected US$18 million, in what they described as a ‘signing bonus’. Instead of putting that money into the Consolidated Fund, where it rightfully and legally belongs, they placed it in a secret bank account for more than a year. When this information was leaked and made public by Mr Christopher Ram, the regime first ridiculed Mr Ram. They went on to deny that any money was paid over to them. This blatant attempt to mislead the Guyanese public has compounded the mistrust the people have for this regime. Many believe that there is more in the mortar than the pestle.
The agreement has also practically given away all the natural gas to Exxon except for some that may come for domestic use. This is incredible.
As the criticism mounted on the regime with accusations of incompetence and corruption, the spinners tried to blame the opposition for this major debacle. Instead of releasing the agreement that they have with Eco and Tullow, they released one that was signed with CGX at a time when the state had no information of the quantity of oil in the basin. Indeed, it was an agreement to attract companies to explore. Moreover, it cannot be compared because CGX’s lease is very much smaller than the Exxon concessions. The real comparison should have been made with that exploration contract signed in 1999. And that agreement did not in any way tie the hands of this regime.
Another very disturbing aspect of the agreement is the silence on local content. Our private sector is not sure of what they can contribute and how it would benefit from this huge find. Already, we see that helicopters are being hired from Texas. A Guyanese company should have been hired for this. Exxon has already stated that the local employment component would be small. Therefore, it appears that our local input, both inside the country and in the diaspora would be extremely limited.
This regime with all the information at their disposal signed a production agreement with Exxon that has been, to put it mildly, vastly beneficial to the company and greatly disadvantageous to Guyana.