In light of the economic pains the COVID-19 pandemic continues to unleash on the oil industry, ExxonMobil is not only in a vulnerable position, but also needs Guyana now more than ever, to ensure value is returned to shareholders. It is with this position in mind that Global Witness, one of the world’s most respected transparency advocates, is calling on President, Irfaan Ali to renegotiate the lopsided deal.
The renewed call is premised on a damning report Global Witness had released earlier this year. The document called Signed Away, exposed how Guyana left US$55M on the table due to poor negotiations with ExxonMobil.
The Global Witness investigation also showed that Guyana’s lead negotiator – former-Natural Resources Minister, Raphael Trotman – rushed to sign Exxon’s deal despite knowing the company would soon announce new oil find results and while experts were telling him to seek more information.
During negotiations, Trotman also suffered an apparent conflict of interest as he was close political allies with one of Exxon’s Guyanese lawyers. The lawyer – Nigel Hughes – has denied he represented Exxon on the deal, but admitted that his firm had represented Exxon since 2009 and that he has worked for the company on other matters.
Furthermore, Exxon’s license is the subject of ongoing litigation in Guyana, with civil society groups arguing it is illegal. And in August, the UN Human Rights Committee demanded Guyana both address reports of corruption during the award of Stabroek and state how oil drilling was compatible with efforts to fight climate change.
Taking these and other factors into account, Jonathan Gant, Senior Campaigner at Global Witness, categorically stated that “President Irfaan Ali has a remarkable opportunity to make a new deal while showing the interests of all Guyanese – not Exxon – are at the heart of his administration.”
Global Witness also believes President Ali’s government should investigate Stabroek to determine if it was properly awarded.
Global Witness believes renegotiating the Stabroek contract with Exxon is possible. Even before the outbreak of COVID-19, Global Witness stressed that the company was highly dependent upon its Guyanese oil finds. As oil prices have crashed during the pandemic, Exxon has continued to point investors to Guyana as a reason for hope, the transparency body noted.
“Now is the time for President Ali and Vice President Jagdeo to not only make good on their campaign promises, but to do one better,” said Gant. “Guyana’s oil licenses – including Exxon’s Stabroek – should be renegotiated. Guyanese people deserve a better deal. And if the government is not prepared to give them this, then the people should call for these bad deals to be cancelled.”