–AG SAYS OF PRODUCTION SHARING AGREEMENT

ACKNOWLEDGING that the Production Sharing Agreement (PSA) signed under the previous government is “lopsided”, the Attorney-General (AG) and Minister of Legal Affairs, Senior Counsel Anil Nandlall says the government is bound by it, or there will be legal consequences.

During a live broadcast on the National Communications Network (NCN) on Saturday, the AG criticised those who are misconstruing how a legal and binding contract works.
“The relationship between the government and ExxonMobil (Guyana) is the relationship that would exist between any foreign investor and a government,” he said, while underscoring that it is made up of contracts, licences, permits and the Laws of Guyana.

While speaking more on the “arms-length” relationship which has been twisted by detractors of development, the AG said that the government is keen on ensuring that the people of Guyana get the best possible deal from the oil-and-gas sector.

In response to a Stabroek News editorial which would have put forth the narrative that the announcement of the Whiptail development will not benefit the people of Guyana, Nandlall refuted these claims, and labelled the insinuation that the government is allowing the oil giant, ExxonMobil to use Guyana, as “hysteria, misinformation, and misconception”.
While the discovery of oil was made under the People’s Progressive Party/Civic (PPP/C)’s watch, it was under the A Partnership for National Unity and Alliance for Change (APNU+AFC) that the PSA was signed.

In the 2016 PSA fiscal terms, the royalty was a mere two per cent, while the recoverable cost oil was 75 per cent.
While highlighting that like any company, ExxonMobil is profit-driven, and there is nothing “immoral or illegal” about that, he explained why the burden is on the government’s shoulders to get benefits for their citizens.

Even with the technicalities surrounding the sector, and the fact that an oil giant like ExxonMobil possesses a team of lawyers, the AG pointed out that the APNU+AFC government bestowed such an immense responsibility upon a subject minister, and that the PPP/C was informed that no expert advice was even given.

“We were not even told at the Parliament that they were negotiating this contract. No public consultations were held; no consultations of any kind were held,” he said, while noting that the PPP/C, which was in opposition at the time, and the Guyanese people were kept in the dark.

He then directed his attention to the US $18 million signing bonus that the APNU+AFC received from ExxonMobil, which was not made public until the then government came under intense criticism.

The funds were deposited into a Bank of Guyana (BoG) account before being moved into the Consolidated Fund.
“When we discovered the contract, we realised that Clause 33 of the contract provides for a signature bonus,” the AG said, while labelling the environment at the time the contract was signed as “nefarious”, given the fact that the contract was hidden.

But why not ‘scrap’ the deal?
Noting that oil was in Guyana’s grounds for centuries, the AG said that the nation did not have the capabilities to exploit it, but this was changed because of foreign investments.
“I can’t point to a country anywhere in the world that has been built without foreign investments,” he said.
The AG then underscored that prudent foreign investors look for an accountable and transparent government, a stable society, respect for contractual obligations and modern laws within that country, etc.

“Guyana today is one of the most sought-after investment destinations in this western hemisphere. You are seeing investors here from all parts of the globe,” he said.
While there are individuals who are very vocal about the oil contract, the AG said that many of them have never even read it, although it is in the public domain.
He then explained that one of the provisions states that the government may not amend, modify, rescind, terminate, declare invalid or unenforceable, re-negotiate or seek to otherwise alter the agreement without the prior consent of the negotiator.

“But once it is signed and executed and it remains extent, valid and binding, this is what is says. We didn’t sign this, but are bound by it,” the AG stated.
Moreover, while refuting the claims that the government is “in bed” with the oil giant, Nandlall highlighted the number of measures that the government has put in place to safeguard Guyana.
For instance, he said, the “capping” of wells has been put in place to avoid oil spills.

“We have a mechanism also that allows us to monitor the oil in the reservoir; the amount that is discovered, etc. All of that are capabilities that we have ensured that were put into place,” he said.