–President Ali says in response to relentless efforts to misconstrue the reality of existing contract with ExxonMobil
–explains that changing contract would have legal repercussions

BLASTING nay-sayers for ignoring the reality, and turning a blind eye to basic contractual obligations, President Dr. Irfaan Ali has said that despite being dealt a bad hand in the form of an APNU+AFC-negotiated contract with ExxonMobil, his administration is working to ensure that Guyana’s future is bright.

Dr. Ali, in his feature address at the Canada-Guyana Chamber of Commerce Maple Leaf Ball Awards Presentation on Friday evening, said: “I don’t want to spend my time on negative energy, but it’s tiring to listen to some of these guys… You think that is how the world operates? That you can just walk in one day and decide I have this contract with you, I’m changing it now? One lawsuit!”

Puzzled by the claims being put forth by former policy-makers and their failing to understand how the terms and conditions of a contract works, President Ali said that it is easy to join the crusade and shout for renegotiation.

“This is not a plaything,” Dr. Ali firmly asserted.
He then went on to say: “…[It] is very popular to say we can change the contract, that is why we’re careful to say that we have to learn from the mistake, and ensure that future contracts do not make the same mistake. And that is what we’ve done; that is what we’re doing.”

Apart from the legal repercussions, the President also went into detail about what other negative effects can emerge from breaching a contract.
He said that investors are drawn to a country by how the system operates, and not by the way it looks.

“You think sophisticated investors look at you and say, ‘Oh, you guys look good! We’re coming to invest.’ They look at your systems; that is why the IMF report so extensively talks about the reform, and the system. But everybody wants a front-page now,” President Ali said.

Conceding that the nation was indeed dealt a bad hand, and that he, too, wishes it were not so, President Ali was adamant that the nation must strive to ensure that this does not reoccur in the future.
“I wish it was a better contract; all of us wish that. We’ve been given a bad hand; we have to correct it now. We have to ensure that the future hands are not that bad, and we are in a better position to call the shots,” he said, adding: “You got to be realistic sometimes; not opportunistic!”

The People’s Progressive Party/Civic (PPP/C) government’s focus to get the most out of the Production Sharing Agreement (PSA) for the Stabroek Block was deemed 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 has been said by the Vice-President, Dr. Bharrat Jagdeo, who also addressed continuous calls for the renegotiation of the PSA.
The Vice-President described the call for renegotiation as opportunistic, highlighting that the APNU+AFC was responsible for drafting and signing Guyana onto the PSA.
Guyana signed a PSA with ExxonMobil and its partners for the production of oil in the Stabroek Block, during the APNU+AFC’s time in government from 2015-2020.

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.

The PPP/C 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.