Even though the gross recoverable resource from the Stabroek Block offshore Guyana has increased to approximately 5.5 billion oil-equivalent barrels, Foreign Affairs Minister, Carl Greenidge does not believe that a renegotiation of the lopsided contract would be appropriate at this time because ExxonMobil and its partners are operating in a “risky environment.”
During an exclusive interview with the Guyana Standard, Minister Greenidge was asked if he believes Guyana deserves more than a mere two percent royalty. He was at the time reminded that there are countries around the world which demand 10 percent and upward.
The Minister said, “…You are not Ghana, Colombia, or Trinidad and Tobago. You are Guyana and the risk you face is a neighbour (Venezuela) with a military capacity to close you down at any time so Exxon is running a risk. I don’t know why people believe there is no risk. They can close you down. What you want is for this company to start producing and do as much of the survey as possible…”
Greenidge continued, “…The risk you have is that Venezuela, under a changed regime or under circumstances that lie ahead of us may stop you from even going through with the exploration as they have done in a particular case before so don’t assume …you didn’t suddenly get oil. It was always there. Why you didn’t get it before? It is because the companies were afraid… The company is operating in a risky environment.”
The official added, “For the investors, they would say to the company, ‘Why you are going to drill there (Guyana)? There are crazy people over the border who may do something.’ So when they go because of that risk, they expect or ask for bigger returns. If they are not offered the prospect of greater returns they go. That is how it works.”
The Guyana Standard then reminded Greenidge of the overwhelming comments from some quarters that given the scale of Guyana’s finds, asking for more, or rather, demanding what the country deserves, would not force the company to walk away.
Greenidge was however opposed to this view. He said, “Exxon has not produced a barrel of oil yet… Therefore it would be an unintelligent reaction to ask for a change of terms before the oil is produced.”
