Guyana’s Alliance for Change (AFC) political party is promising oil and gas transparency reforms and a review of existing contracts if it wins the September 1 general and regional elections, despite its role in shaping the 2016 Production Sharing Agreement (PSA) with Exxon that has sprouted six sanctioned oil developments.
In a newly released policy statement, the opposition party pledged to publish all petroleum agreements, amendments, and seismic data within 180 days of signing, and to require oil companies to disclose production, flaring, reinjection, and insurance data every six to twelve months. The AFC wants to make all seismic and related data the property of the government.
There is also a promise that proprietary aspects of agreements could only be kept secret for up to 18 months. It also promised legislative amendments to the Petroleum Activities Act, the Environmental Protection Act, and other legislation applicable to the petroleum sector.
Many of the AFC’s transparency pledges are already in practice. The government currently publishes petroleum contracts, production licenses, and monthly data on oil output and flaring. Environmental permits are public, insurance arrangements have been gazetted, and crude lifting and exploration notices are issued by the Maritime Administration Department (MARAD).
Regarding the prized Stabroek Block asset operated by ExxonMobil, AFC Executive David Patterson has told multiple local media houses that the party plans to renegotiate the PSA with Exxon.
The AFC’s new position marks a shift from its record in government. In 2016, then Natural Resources Minister Raphael Trotman, an AFC executive, signed the PSA with ExxonMobil for the Stabroek Block. The contract, when published, prompted years of criticism from some locals for terms they deemed favorable to Exxon and its partners, Hess and CNOOC. The former coalition government, comprising the AFC and the larger APNU party, had staunchly defended the deal and rejected calls for renegotiation.
The current administration, led by the People’s Progressive Party Civic (PPP/C), has similarly ruled out renegotiating the contract, citing the need to protect contract sanctity and maintain investor confidence. The government has instead focused on improving terms in new contracts and attributes a surge in oil development and revenues to the PSA’s attractive fiscal terms.
The AFC has not made it clear how it would go about enacting such a renegotiation. The Stabroek Block PSA has a stability clause that protects it from unilateral changes. All parties have to agree to change the terms, and Exxon has said it will not renegotiate.
The terms played a part in the Exxon-led group’s commitment to invest more than US$50 billion to develop massive oil fields discovered at the Stabroek Block.
AFC’s leader, Nigel Hughes, has also drawn scrutiny. Hughes is a partner at Hughes, Fields, and Stoby, a law firm that provides legal services to ExxonMobil Guyana. Though he has stated he does not personally handle ExxonMobil matters and would not comment on oil and gas, or leave the firm, unless elected president, critics have raised concerns about a potential conflict of interest. Hughes has said an oil and gas committee within the party will handle sector policy, while he abstains.
