No review of ExxonMobil contract – President Granger

first_imgJust over one week after Presidential Adviser on Petroleum, Dr Jan Mangal said Government can review and renegotiate the Production Sharing Agreement (PSA) with ExxonMobil, President David Granger on Monday said Cabinet does not intend to do such at this time. He noted that the PSA is currently engaging the attention of Cabinet and a decision would be made.“The contract is an agreement between two parties and these things have to be portrayed carefully. There is no prospect at the said time that it is the intention of Cabinet to review it (the contract) but as I said, it is before Cabinet,” Granger said as he spoke to reporters on the sidelines of the swearing in ceremony of acting Justice of Appeal, Rafiq Turhan Khan.But Dr Mangal told reporters on the sidelines of an oil and gas forum at the University of Guyana last Wednesday that when situations change and one party to a contract is dissatisfied with the contract it has with another, then amendments can be made. He was at the time referring to the oil contract between Guyana and ExxonMobil, criticising the low royalty, tax exemption and large concession given to the US oil company.Under the renegotiated agreement, Guyana receives two per cent royalty on earnings from ExxonMobil’s oil sales while the US oil giant would not be required to pay taxes on its share of the profits and according to the President’s Petroleum Adviser, that is low compared to global standards. He also raised concerns about the system used to negotiate that agreement and also the expertise of the persons doing the negotiating.Former Attorney General Anil Nandlall called the President’s statement an abomination and a slap in the face of the Guyanese people. He noted that the PSA is the most important contract entered into by any Government since Independence and called for the immediate review of the agreement since there are several analysis of the agreement that supports that view.“It is pellucid to any sensible Government that this contract was a badly negotiated contract… any government that has the people’s interest at heart would want to ensure that Guyana’s interest and the people’s interest are paramount and if that contract does not make those interests paramount then a government would want to have that contract rectified,” Nandlall said in a invited comment.“This Government seems to be acting in the best interest of ExxonMobil and not Guyana and everything they have said and done thereafter is supportive of that posture. Therefore, the President’s latest disclosure confirms and corroborates that posture,” he added.He further stated that the contract is riddled with illegalities and contravenes certain sections of the law.Based on the 1999 agreement and the new 2017 deal, ExxonMobil is controlling the entire Stabroek Block of about 600 blocks or 10 times more than what Guyana’s laws allow. However, the oil and gas expert noted that allocating such a huge chunk is contrary to international best practice and creates unfair competition. Additionally, since the controversial statements were made, the Government has since indicated that Dr Mangal is not authorised to speak on behalf of the President and Cabinet.last_img read more