–Jagdeo blasts Coalition’s management of oil sector

THE current government’s focus to get the most out of the Production Sharing Agreement (PSA) for the Stabroek Block is a matter of ‘fixing the mess’ that the previous coalition government left the country in when it signed the deal with ExxonMobil and its co-venturers, Hess and CNOOC.

This was noted by Vice-President Dr. Bharrat Jagdeo during a recent Online interview, where he addressed continuous calls by members of the A Partnership for National Unity + Alliance For Change (APNU+AFC) opposition for the renegotiation of the PSA.

The Vice-President described the call for renegotiation as opportunistic, highlighting that the APNU+AFC were the ones who drafted and signed Guyana onto the PSA.
Dr. Jagdeo specifically referenced comments by Leader of the Alliance for Change (AFC) Khemraj Ramjattan, noting that it was his fellow party members, including former Minister of Natural Resources Raphael Trotman, who saddled Guyana with “the lopsided agreement”.

“These are people who are complicit in putting us in this mess; they signed an agreement when we had three billion barrels of proven oil resources. Raphael signed the agreement despite advice. The terms that we call lopsided are part of that agreement,” Dr. Jagdeo said, adding:
“Ramjattan suddenly wants to change his agreement; this is Trotman, the former General Secretary of his party who signed it. And on the agreement, it has the law offices of one of his other members of his party on it; now they want to change it. They could have taken a position at the beginning of this agreement…”

Guyana signed a PSA with ExxonMobil and its partners in 2016 for the production of oil in the Stabroek Block, during the APNU+AFC’s time in government from 2016 – 2020.
Under the PSA, Guyana will be receiving, at a minimum, two per cent royalty on all oil produced in the block, plus 12.5 per cent profit oil. As the capital and operating costs are liquidated, Guyana’s share of profit oil will increase, rising up to a 52 per cent return on every barrel of oil sold.

However, Guyanese have continually contended that the country did not receive a fair agreement. According to Dr. Jagdeo, while the current government has maintained that it will not be renegotiating the contract, it continues to try to get the best deal through other means.
“We’re trying to fix a mess now by local- content legislation, which they never passed. They had all the years,” Dr. Jagdeo said.

Moreover, the government has also created new fiscal terms for future PSAs, ensuring that no future deals are lopsided.
Under the new fiscal terms, future companies exploring for oil and gas offshore Guyana will be subject to 50 per cent profit sharing, in addition to a royalty rate of 10 per cent, and corporate tax of 10 per cent among other things.