No basis for renegotiating ExxonMobil contract says Guyana’s Finance Minister

Winston Jordan, Guyana’s Minister of Finance

Guyana’s Minister of Finance, Winston Jordan, says there is absolutely no basis for a renegotiation of the contract between the country and US super-major ExxonMobil, for oil production set to begin in 2020.

The South American country is expected to receive two-percent royalty on gross earnings and 50 percent of the profit oil. Mr. Jordan was asked at a press conference on Monday if he was satisfied with this deal.

“It is not for me to be happy or unhappy. Once cabinet has approved a document, there is the need for collective responsibility. If you don’t like something and you are passionate about it, you have the option of resigning…I am saying the contract is known by Cabinet and it has been received by Cabinet and it has been approved by Cabinet,” he said.

Further, he acknowledged that there are calls by some for the contract between the Government of Guyana and ExxonMobil to be renegotiated. The Finance Minister was adamant that there is no need to go that route, since the contract was already in place when the new Government took office in 2015.

“We inherited that contract. If anything, it is a plus for this Government that we are able to extract something more but we inherited the contract from the previous Government. There is no basis of renegotiating a contract you inherited,” he pointed out, adding that any attempts to so would also set a bad precedent for Guyana in the eyes of the international community.

“What will happen to commerce and international transaction if you think that somebody wakes up tomorrow and said; oh we get robbed and so on…we want to negotiate the contract again and so on…” he questioned.

Mr. Jordan added that persons should take several factors into consideration before making any judgments, including the fact that companies were skeptical about pursuing oil exploration efforts in Guyana, due to territorial claims by what he described as “our friends next door”, referring to the country’s western neighbor; Venezuela. In 2013 Venezuelan naval forces detained a ship which was conducting a seismic survey under contract for Anadarko Petroleum Corporation, in Guyana waters. The vessel at the time had five U.S. citizens on board.

Going forward, Mr. Jordan said, “With all the other discoveries and so on, not covered by this contract we have a basis on which to drive a harder bargain and negotiate for more.”

He reminded that there have been tremendous attempts at oil exploration in Guyana in the past, but no one succeeded until ExxonMobil took the risk.

He said, “We are going to have resources coming to Guyana that could finally put Guyana on a sustained path to high-end development where two percent and three percent could become things of the past. It depends on how well we use these resources now and into the future and how well we seek to ensure that we have balanced growth.”

Mr. Jordan was part of a government team that recently visited the ExxonMobil Campus in Houston, Texas for a tour and meeting with company officials.