PRESIDENT and CEO of Guyanese oil services company Totaltec Lars Mangal has defended the contract signed between the Government of Guyana and ExxonMobil, saying that while there may be room for improvement of the agreement, time is of the essence.

Mangal was speaking during an interview with German news agency Deutsche Welle in late February 2020.

Over the period since the disclosure of the ExxonMobil contract in late 2017, the Government of Guyana has been severely criticized for what many believe are poor contract terms including the 2 percent royalty and the 50/50 profit oil split.

However, Mangal said that the agreement is good for both the people of Guyana and the contractor. Following ExxonMobil’s discovery of 16 successful wells in the offshore Stabroek Block from 2015, production commenced last December at the Liza Phase 1 and so far three tankers have departed Guyana each bearing one million barrels of light, sweet crude.

“We now have the opportunity to change this country, to drive development, to modernize the economy and to lift every Guyanese household out of poverty. Exxon is one of the most capable oil companies in the world. We have a technologically complex offshore project here in Guyana that smaller companies couldn’t handle at the pace required. Given the depth of the field (1000-3000 meters), extracting oil in Guyana is like landing on the moon,” he said.

He said that as with all agreements, there may be room for improvement. “The question is whether we have time to do so and will it create overall value?” he asked.

Mangal pointed out, too, that the global economy is transitioning from fossil fuels to renewable sources of energy. “Fossil fuels are also being used less in electricity generation. The window of opportunity for Guyana is closing fast and the country must act with a true sense of urgency,” he said.

He called ExxonMobil a competent partner and said that Guyana is now the crown jewel in Exxon’s portfolio in view of the state of the international oil business and the great exploration success they have had in Guyana.

“Both parties have a stake in success here. It has to be looked at as a strategic partnership. The country has an unprecedented opportunity for a paradigm shift. But time is pressing. Our goal must be to produce 2 to 3 million barrels of oil a day as quickly as possible. Otherwise, there is a danger that we cannot benefit as a society from this resource,” he said.