In a recent interview with the Stabroek News, outgoing United States Ambassador Sarah-Ann Lynch stated the United States government does not involve itself in negotiations on behalf of its private sector and that it acts only as a facilitator to ensure companies know what investment options are available in foreign territories. This was in reference to the 2016 Petroleum Sharing Agreement (PSA) between ExxonMobil (and its two subsidiaries) and the Government of Guyana where there have been persistent calls from a wide cross-section of the populace for the contract to be renegotiated so that Guyana gets a better share of the revenue derived from the extraction of crude oil off its shores.
There can be no doubt that the PSA is overwhelmingly weighted in favour of the U.S. oil giant due mainly to the previous Administration’s failure to secure terms and conditions that are more favourable to the country. For example, the absence of ring-fencing provisions results in higher recoverable thereby reducing Guyana’s share of profit oil. Then, there is the two percent royalty, which is perhaps lowest in the world, not to mention the over-generous fiscal provisions as well as the requirement for Exxon’s corporation tax to be paid by the Government from its share of profit oil.
