Oil contracts signed after Exxon PSA will be reviewed – Guyana Opposition Leader

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Should the opposition People’s Progressive Party Civic (PPP/C) win the upcoming elections in Guyana, efforts will be made to review contracts signed after the ExxonMobil Production Sharing Agreement (PSA) in order to extract more revenue for the South American country.

While Opposition Leader Bharrat Jagdeo made it clear there is no intent to revisit the ExxonMobil PSA, he said contracts signed after the company’s mega discoveries offshore, must be reviewed.

Jagdeo gave the assurance on Wednesday September 4, while appearing on a local radio programme.

“Every single one of those agreements, yes we will do this for every other contract that was signed,” the Opposition Leader said.

He opined that ExxonMobil can, given Guyana’s status as a frontier country with no proven reserves at the time the contract was signed in 1999, legitimately argue in favour of the terms outlined in the agreement.

He told the listening audience, including the Diaspora, in ExxonMobil’s case “they can claim frontier advantages,” but “every contract that was signed after ExxonMobil like the Tullow one, we have made it clear that we intend to review those.”

Responding to criticisms of government’s take from the PSA with ExxonMobil, Jagdeo was pellucid that revenue to the country can be increased through a range of measures beyond royalty and profit oil.

He said, the “idea would be to get more in an overall sense…royalty is just one of the ways you can get more; you have to look at other ways you can get more.”

Jagdeo cited as examples, better pre-contract audits and a revision of the taxation regime, among other initiatives.

“We made it clear, when you look at a model contract it  has to look at the total take that comes to Guyana,” he said.

Expectations 

The PPP/C General Secretary also took the opportunity to seek to temper expectations among the populace over the immediacy with which billions will begin flowing into the coffers from the offshore oil-fields.

According to Jagdeo, “we are at the cusp of transformation but not everything is automatic.”

“We must not take it for a given because we find oil we are going to be prosperous tomorrow or in the future …We can just see the experiences around the world.”

He pointed to neighbouring Venezuela, which had been exporting 3 million barrels of oil per day, and said, “look at where they are today; Angola to Equatorial Guinea to Nigeria and many other countries, they are in a worse situation after they discovered oil than before because [an] oil find can destroy the rest of  the economy through what is known as the Dutch Disease….critical to the future would be how we manage those resources, they have to be managed properly.”

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