Wednesday, June 7, 2023

Guyana Minister dispels claims government promised to renegotiate Exxon deal

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A Minister of Government in Guyana, Charles Ramson Jr., wrote a letter dispelling claims in one section of the local press that the People’s Progressive Party Civic (PPP/C) administration promised to renegotiate the Stabroek Block Production Sharing Agreement (PSA).

The letter came after several reports were made by Kaieteur News, an advocate for renegotiation of the contract, that the promise was made in the lead-up to the 2020 elections. It recently quoted former Minister, Khemraj Ramjattan, as saying this too.

The local newspaper claims that a section of the party’s elections manifesto, which states it will “engage oil and gas companies in better contract administration/renegotiation”, is failing to deliver on a promise.

Stabroek Block agreement equitable for both government, investors – Exxon | OilNOW

“As a member of the PPP, this falsity about the PPP’s position leading into the election must be corrected for the record,” Ramson Jr. said, referring to upcoming local government elections.

He explained that the line meant “we would have better contract administration with Exxon and renegotiate better terms with all other oil and gas companies.”

This is consistent with Vice President Dr. Bharrat Jagdeo’s statements while Opposition Leader. In the lead-up to the 2020 polls, he was repeatedly posed with the question of renegotiating the deal, and he always said the party’s position is to respect the sanctity of the deal.

Guyana’s take from oil production larger than Exxon, COVs, royalty not recoverable | OilNOW

However, Dr. Jagdeo had said that the contract, which was signed by the previous administration in 2016, could have been better. Hence, he promised to ensure future agreements for development of hydrocarbon resources offshore Guyana are more favourable to the country.

Under the Stabroek Block PSA, Guyana is entitled to half the profits and two percent royalty paid by the contractor. Since oil production started in December 2019, the country has received over US$1.2 billion in revenue, some of which is already been used to help fund major projects in the South American country.

ExxonMobil is the operator of the Stabroek Block with a 45% stake, while Hess and CNOOC own 30% and 25% respectively. Four projects have been approved on the block so far – namely Liza Phases 1 and 2, Payara and Yellowtail.

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