– Harmon

GOVERNMENT will not renege on the 2016 Petroleum Sharing Agreement (PSA) it signed with Esso Exploration and Production Guyana Limited – a subsidiary of U.S. oil giant ExxonMobil, Minister of State Joseph Harmon said.

Since the release of the ExxonMobil Contract late December last year, Government has received fierce criticisms from both civil society and the political opposition over several aspects of the agreement – from the percentage of royalty to the signature bonus and on issues such as local-content provisions.

On Thursday while responding to reporters at the Ministry of the Presidency, the Minister of State said the Government will uphold its commitment under the contract with ExxonMobil and will not back pedal.
“The President has said that we have dealt with the ExxonMobil contract and that we are not going back on it. We are not back on it. It was dealt with at Cabinet and the President has pronounced on the matter and that is the final pronouncement as far as we are concerned,” Minister Harmon told reporters.

Reminding reporters that Government and the country by extension have commitments under the contract, he said “we will work with what we have”.
Under the present contract, which was reviewed by the A Partnership for National Unity + Alliance for Change (APNU+AFC) Administration, Guyana will receive 50 per cent of the profits as an equal partner, in addition to a two per cent Royalty.

Additionally, Guyanese are expected to benefit from “preferential treatment” in the provision of goods, materials and sub-contractual arrangements with ExxonMobil’s petroleum operations here, in keeping with Article 18 of the Agreement.

According to a section of the agreement, within a 60-day period prior to the commencement of a calendar year, Esso and its partners CNOOOC Nexen Petroleum Guyana and Hess Exploration Guyana Limited which hold interests in the Stabroek Block , and the subject minister shall provide a yearly plan for the utilisation of qualified Guyanese personnel for the upcoming year. Both parties shall then meet to discuss the plan’s effectiveness.

Additionally, the oil company is required under the agreement to provide the subject minister, within a month after the end of each half-year, reports outlining the company’s achievements in utilising the services of qualified Guyanese personnel.
But the Private Sector Commission (PSC) back in January had expressed the view that much more should have been done to incorporate local content and greater benefits for businesses here in the petroleum agreement between the Government and ExxonMobil’s subsidiary.

Pointing out that the cost of energy is presently the primary limitation to the expansion of business and growth in Guyana, the PSC said there is nothing in the agreement to indicate that Guyana owning such large oil reserves would translate into reduction of the costs of energy to Guyanese.
Minister Harmon, on Thursday, said Government is cognisant of the issues which have arisen.

GUIDED BY EXPERTS
“There are issues which have arisen and we will be guided by international experts. We will be guided by what is best practice going forward,” he posited.
“We are looking at the benefits to be accrued from this contract and from all future contracts,” he added while making reference to the decision to release all contracts.
The minister of state also used the opportunity to warn against misleading the nation as he took a shot at a local newspaper which, in recent days, has been reporting on a Petroleum Agreement Ghana has signed with ExxonMobil.

“Sometimes we hear and we read some things that are happening in other countries and countries whose economic conditions are different from ours, but if we import these things as if it is Guyana, one gets the impression that all of these things are happening in Guyana…. We understand what best practices are, we understand also that there are implications of decisions which are made but when we seek to make it appear as if these things are happening in Guyana by putting it on the front page of a newspaper, I believe that that is a little bit disingenuous and I think that it is having an impact on people who read the newspaper,” Minister Harmon posited.

Meanwhile, over at the Opposition Leader’s Church Street Office on Thursday, former President, now Opposition Leader, Bharrat Jagdeo said some persons have been using the contract signed between Ramotar and Canadian oil and gas exploration company, CGX, to attribute Minister Raphael Trotman’s “inspiration” for the recent contract signed with ExxonMobil.

“That contract that Donald Ramotar signed with CGX was signed in a period when we were exploring for oil. They didn’t have any find, we did not know whether we were going to find oil,” Jagdeo posited.

He said when Natural Resources Minister Raphael Trotman renegotiated the contract, he knew that there were $3.2B barrels of recoverable oil, that they were finding more oil and that other countries had greater interest in Guyana.

“A lot of those provisions that found their way into the CGX contract were not in the Janet Jagan contract, so if Trotman argued that he renegotiated a better deal; he had to negotiate a better deal on the Janet Jagan’s agreement because that was what was up for re-negotiation,” he opined.