Dear Editor,
Attorney-General Nandlall is currently on a visit to New York. Yesterday (July 2nd) he appeared at two meetings – one at Villa Russo (audience 60), second at Royal Restaurant on Rockaway Blvd (audience 150). At the Villa Russo meeting, I asked Mr. Nandlall a question about the Oil Contract. I held up a poster-board on which we compared main features (Royalty, Profit Share, Profit tax, Environmental Responsibility) of the Guyana’s vs Suriname’s Contract. Suriname gets 6.25% vs Guyana 2% on Royalty. Mr. Nandlall tried to cut me short twice. I explained that the poster-board is a nice visual to help folks easily grasp the pivotal issues of the contract. On Royalty I said Guyana is losing US$24 billion on 9 billion barrels reserves in the Stabroek Block (9 billion times average price of US$60 times 4.25%). At this point Mr. Nandlall cut in to say he himself had been for a few years been writing and criticizing the lopsided Contract. I then said: “In that case I’ll make it short: Why don’t you and your gov’t ask ExxonMobil to come back to the table to review the terms of the Contract?”
Mr. Nandlall began talking about “four corners” of a contract” that must be respected. He said the contract had been negotiated in 2016 by the previous govt. And, then pronounced on the most crucial point of this exchange: He said from now on his gov’t shall negotiate new PSA’s on all future oil blocks – “on our terms”. Really? Which future blocks? I reproduce here a table showing the PSA’s that have already been negotiated and signed. Which blocks is Mr. Nandlall promising to negotiate?
The problem the Oil & Gas Network has with the Government of Guyana is that it has thus far stubbornly refused to simply ask ExxonMobil to come back to the negotiating table. Not demand, not threaten to litigate the contract. Just ask. Let ExxonMobil go on the record and say no. Let ExxonMobil seek refuge in “sanctity of contracts”. We do not know how EM would respond. We are of the opinion ExxonMobil is interested in a long term harmonious, stable relationship between the Oil Company and the host gov’t – and would therefore be amenable to work out fairer terms to make both parties happy to sustain a long term relationship. I conclude by saying: On the royalty item alone of one oil block the Oil companies are walking away with US$24 billion ill-gotten gains due to a lopsided contract. These are windfall gains at the expense of the poor Guyanese people – per capita income US$4,000; about 30% of the population survive on less than US$2 a day. This Contract must not stand. We need a gov’t that will stand up for the people. Credit is due to Mr. Romeo Hitlall for organizing the Villa Russo meeting all in a matter of hours. I thank AG Nandlall for making himself available to answer questions from the Guyanese diaspora.
Sincerely,
Mike Persaud
