Ever since the release of the 2016 Production Sharing Agreement (PSA) between the Government of Guyana and ExxonMobil there has been an intense and energetic public debate on its terms, especially those relating to the financial aspects. Such has been the strength of feeling of some critics that calls have been made for the re-negotiation of the contract. It has also been suggested that “(R)emaining oil blocks should be marketed only after Exxon’s contract is renegotiated.”
Time will tell whether both or either or neither of those ‘calls’ will be heeded. I forbear to comment on those matters as I regard them as being beyond my ken. Whatever the outcomes of the aforementioned debate, however, it seems that the decision to produce oil from the Liza well by 2020 will be implemented. Although different estimates of the Guyana revenue intake have been touted, it is generally expected that significant additional financial resources will accrue to Guyana. It is with respect to the use of those resources that I wish to make my first comment.
In the APNU column on ‘The Future of Agriculture’ published in Kaieteur News on August 13, 2017, President Granger is reported to have said that “Revenues from the petroleum sector will be used to further develop and modernize our agriculture sector” (is the Minister of Agriculture spearheading preparations on this matter?). Such a statement may be indicative of a policy prescription in one sector. Maybe there are other government-sourced prescriptions in other sectors. Be that as it may. It is my view that the situation requires a mechanism which will cater for stakeholder involvement and provide synergy, coherence and a sense of national ownership of the process as well as its result. The National Development Strategy produced under the leadership of the late Dr K F S King could be employed as a guide, suitably modified if necessary.
My second comment concerns a critique made on the size and the legality of the Exxon concession. I do not know whether Regulations No 5 of 1986 made under the Petroleum (Exploration And Production) Act 1986 were operative in 1999 when the Agreement was signed with Exxon. Those Regulations specify inter alia that “The Minister may consider an application in respect of more than sixty (60) blocks where the Minister is satisfied that special circumstances exist for doing so.”
Assuming that the Regulations were in force at that time and that the Minister considered that “special circumstances” existed for granting more than sixty (60) blocks to Exxon, I incline to the view that the “special circumstances” related to national security considerations.
For example looking at the map delineating the contours of the concession ‒ see Stabroek News February 23, 2018 ‒ it seems that its eastern boundary is along part of the Guyana-Suriname maritime boundary (that part coincides with the maritime boundary determined in 2007 by the Arbitral Tribunal established under the United Nations Convention on the Law of the Sea (UNCLOS); the western boundary is along a part of the maritime boundary with Venezuela observed by Guyana. It is determined in accordance with the international law principle of equidistance.
Claims challenging Guyana’s sovereignty over land and maritime spaces have been with us for all of our independent life. Those claims have hindered our development and consumed inordinate amounts of our human and material resources. In all the circumstances I believe that we should always be conscious and appreciative of the national security dimension in all its plenitude in the conduct of Guyana’s domestic and foreign policies and the commentaries we make of aspects of them.
Rashleigh E Jackson