Jagdeo dismisses Ali position on review of Exxon contract

Leader of the Opposition, Bharrat Jagdeo, and Presidential Candidate of the PPP/C, Irfaan Ali

IN a classic case of him not being his ‘own man’, PPP General Secretary, Bharrat Jagdeo, on Thursday, dismissed the views of its Presidential Candidate, Irfaan Ali, and declared that the party will be sticking to its plan to review the ExxonMobil contract, if it is elected at the upcoming General and Regional Elections.

Jagdeo’s remarks contradicted what was said by Ali according to a recent report from Reuters. Ali had told the news agency that ExxonMobil’s oil contract with Guyana would not be renegotiated if the opposition wins the March 2 elections, and he would, instead, administer the deal better, after reviewing the terms. “We have made it clear from the beginning and the position is in the public, every contract has to be reviewed,” said Jagdeo, during a press briefing at his Church Street Office, on Thursday.

Jagdeo’s blunt dismissal of Ali’s views comes at a time when Guyanese have insisted that Ali is a ‘puppet’ and that any Irfaan Ali-led government would be controlled by Jagdeo. Although Ali has claimed that he will be steering his ship, persons still have their reservations about a government led by him. In a not so subtle show of authority, Jagdeo said: “there are contracts signed after ExxonMobil that got better terms than even the Exxon one, so every production contract going forward will be renegotiated.”
Despite saying this, the opposition leader said Ali’s remarks are not inconsistent with the PPP/C’s position. Similar to Ali, Jagdeo said with the current ExxonMobil contract, without renegotiations, Guyana could get more from better contract administration through several areas.

According to the Reuters report, while the PPP/C has criticised President David Granger’s 2016 deal with ExxonMobil, Ali called the company a “pioneer.” “The PPP’s platform pledged to immediately engage the oil and gas companies in better contract administration/re-negotiation,” said Reuters.

“Exxon is a different case…Exxon was a pioneering investment…but those that came after that time they were not pioneering, so they have to be examined in totality,” Ali said during the interview. In 2018, the Guyana Chronicle had reported Minister of Natural Resources, Raphael Trotman as saying that all terms of the ExxonMobil Petroleum Agreement will be up for review in four years. The minister defended the much-criticised contract, maintaining that there is no such thing as a ‘perfect contract’. He said that the signing of the agreement with ExxonMobil was made in the interest of attracting investors to Guyana.
Trotman had said that up until 2015, for many years, there had been no discoveries of oil in Guyana and the country is still not completely ‘de-risked’, realities which must be taken into consideration.

He noted that what is more important is for the country to shift its focus to more pre-eminent concerns such as how best to utilise the volume of money it will be receiving to safeguard a better life for its citizens. “I think now the more important question is what do we do with what we are going to earn and how do we prepare for future generations in terms of healthcare, roads, bridges, the opening up of the country,” Trotman stated.
The minister said that in the future, the government will have improved opportunities to negotiate different terms for any new contracts due to the country’s changing realities.
Minister Trotman had indicated that after some years of experience in oil production, there may be a number of things the government will want to address when the ExxonMobil contract is up for review. Guyana’s first million barrels of light crude from the Stabroek Block set sail to the United States on Monday. The crude began the voyage in the crude oil tanker, the Yannis P, and is bound for the U.S. Gulf Coast in Galveston, Texas.

The Liza crude, a light-sweet grade, was taken from the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel which has a production capacity of up to 120,000 barrels of oil per day and an overall storage volume of 1.6 million barrels. It has been projected that the oil revenues from this venture alone will realise approximately US$300M in this first year and more than triple that figure over the next five years. The Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate, Esso Exploration and Production Guyana Limited, is the operator and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Limited holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 per cent interest.