ExxonMobil has a right to make money on its investment – Bharrat Jagdeo

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Bharrat Jagdeo, former President of Guyana

Former Guyanese President Bharrat Jagdeo today said contracts are sacrosanct, must be respected and that the US Oil Exploration Company, ExxonMobil, has a right to make money on its investment.

Mr. Jagdeo was speaking at his Church Street, Georgetown Office of the Leader of the Opposition, where he was asked to weigh in on the heated public debate by sections of society for a renegotiation of the Petroleum Sharing Agreement (PSA) with ExxonMobil.

Speaking to the contracts inherited by the Peoples Progressive Party Civic-led government back in 1992 following elections that saw a change in government after 28 years, Mr. Jagdeo told reporters renegotiations can pose a problem since it infringes on the sanctity of the deal.

According to the former Guyanese President, at that time the PPP had pushed for the renegotiation of contracts it inherited from its PNC predecessors, his government was accused of trying to “destroy the climate for investment in Guyana by not respecting the sanctity of the contracts.”

The PPP, he said, had experienced major difficulties in attempting to renegotiate or overturn contracts it had inherited and ultimately had to respect.

As it relates to the current PSA with ExxonMobil, Mr. Jagdeo was adamant. “Let me make it clear, ExxonMobil came here under the PPP, we believe they have a right to make money on their investment; but we believe, Guyana; these are our resources and the bulk of the benefits must go to Guyanese and that a fair agreement that allows ExxonMobil to do well in Guyana but also allow our people to benefit from these resources.”

The trained economist told members of the Guyanese media corps ExxonMobil was not operating in Guyana out of love but rather profit.

“They are not coming here because they love Guyana or all of us…they are coming here because they see a good investment opportunity…they would not come here unless they get a chance to make money on their investment and every investor should be allowed to do that,” he said.

He argued that the bulk of the resources must however, go towards the benefit and upliftment of the Guyanese people and that “…a fair agreement must be struck in that regard.”

Mr. Jagdeo said his party believes the contract in its current form does not offer this and further lamented what he called the “latest feeble attempts” on the part of the administration to defend the PSA.

He was referring to Business Minister, Dominic Gaskin’s comparisons of gold earnings against projected oil revenues presented to the Private Sector Commission (PSC) on Tuesday last at its Oil and Gas seminar.

The former Guyanese President said the PPP holds firm to the view the current administration “did not do a good job of representing us (the country)” in its 2016 renegotiation of the PSA with ExxonMobil – renegotiated after the initial 2015 discovery.

Both ExxonMobil and Guyana government officials have indicated that the 1999 agreement was not ‘renegotiated’ since there was no basis for such, but instead what obtained was a modification of some of the terms that for example, saw Guyana receiving a 2% royalty and signing bonus.