Even though local, regional and international oil experts and organizations have criticized the Stabroek Block Production Sharing Agreement for being grossly in favour of ExxonMobil, AFC Leader, Khemraj Ramjattan still believes that the contract represents one of the best decisions the coalition ever made while in office.
During a late night live stream on the APNU+AFC’s Facebook Page, Ramjattan pointed to a few factors which influenced the deal Guyana negotiated and accepted.
The former Minister said, “You had Venezuela coming down our backs and doing a decree that all the water out there belongs to them and they had chased ExxonMobil from working there.”
He added, “We also had people advising us who said that in a matter of years, when the world transitions to renewables, the price of oil will go down very very low so people said it is best that we have Exxon out there…”
Ramjattan was keen to note as well that oil, unlike Guyana’s sugar industry, is a money maker while adding that the economy stands to benefit greatly from it. The Opposition Member also sought to note that the former regime was able to negotiate a better deal than the 1999 one that was issued by the Janet Jagan administration. Referencing some of the “improvements” the coalition made to the deal, Ramjattan boasted that Guyana was able to get an US$18M signing bonus, a 50 take of profit oil, and a two percent royalty instead of one.
The former Minister said, “…So we got a better deal than Jagan… You have to remember that Exxon had a 40 year exploration contract and they could have locked off the Liza well and say we going and explore more . So what you think would have happened ? By 2020 we won’t have oil money…”
Irrespective of what the local critics may be saying on a daily basis, Ramjattan maintains that it is all noise in the face of the improvements he pointed to.
Since the release of the 2016 Stabroek Block deal in 2017, many local and international stakeholders have said that the contract leaves Guyana exposed to wanton abuse since it has no ringfencing provisions which prevent costs associated with other fields to be deducted from the revenue gained from a producing field. The deal has also been criticized for having a paltry US$300,000 contribution to local content as well as having no provisions in place for proper insurance coverage for oil spills.