“It is not enough to demand the mere disclosure of final contracts. While it is an important element of transparency in the oil and gas industry, another key aspect is requiring openness in contract negotiations. Guyana must make sure there are legal requirements for this or else the ExxonMobil disaster can repeat itself.”
Those are the words of Oil and Gas Expert and Director of Power and Money at Oxfam America, Ian Gary.
Oxfam America is a confederation of 20 independent charitable organizations which seek to fight some of the factors that lead to poverty, one of them being the poor governance of extractive wealth.
Gary told the Guyana Standard that he has been paying attention to the relationship ExxonMobil shares with government officials as well as its message that the country must respect the sanctity of contracts. Gary, who has several years of experience, said that if a contract is found to be giving a nation less than what it deserves, a call for renegotiation is not a bad decision.
He stressed however that in territories where governments are new to oil, and the company’s say holds more sway than that of the citizenry, then it becomes almost impossible to determine what a “fair” contract is.
Given what has taken place in Guyana thus far, Gary stressed that “what constitutes a fair contract should be a national conversation. If it is found to be unfair, the country must have a say in how to go about renegotiation.”
The Oxfam Director added, “That said, over the last decade, some countries have been successful in renegotiating oil and mining deals. Believe it or not, smart companies know that fair deals will stand the test of time while deals that are seen as unfair will be under considerable pressure for renegotiation. But if they know there won’t be much pushback on the unfair deal, then they have no care in the world.”
Gary stressed that this is one reason why openness in contract negotiations and the disclosure of final contracts must go hand in hand. He said that the country must be informed every step of the way.