CGX’s 1999 contract signed during dry exploration era – Jagdeo

Oil sector

The CGX contract signed by the former administration is being defended by former President Bharrat Jagdeo, who firmly believes that the terms of the 2016 Production Sharing Agreement should not have been modelled after it.
During a press conference on Thursday, Jagdeo took on critics of the CGX contract. He said the coalition Government had a better chance at securing a good deal than the PPP administration did. This, he pointed out, was because the former administration was seeking to attract companies who would make billion-

dollar investments without assured returns.
“There are some facts we have to get straight,” Jagdeo emphasised. “That contract that Donald Ramotar signed with CGX was signed in a period when we were exploring for oil. We didn’t have any find. We did not know whether we were going to find oil. We were encouraging people to spend hundreds of millions. So, in that period, there was a need to encourage investors,” he explained.
Jagdeo pointed out that when Natural Resources Minister Raphael Trotman signed the agreement, the Government already knew there was recoverable oil in the Stabroek block. He also observed that there was great interest in Guyana as a potential oil producer — all factors that should have led to Guyana getting a better deal. “Unlike in the past, we had to really press people to come and take up blocks. We had these blocks lying around, no one wanted to come and take them up because they had to spend money. So that’s the first difference. The second difference is in the size of the areas. ExxonMobil’s concession is multiple times

bigger than CGX’s concession.
“Thirdly is that we can’t (compare) the Ramotar contract with Exxon. Remember Exxon had a contract that was signed in 1999. What they renegotiated was that contract, not the contract that they had similar to the one Ramotar signed. They renegotiated the Janet Jagan agreement, and a lot of those provisions in the CGX contract were not in the original agreement,” he explained.
He posited that even if Exxon had argued for similar treatment as CGX, the current Government had argued that no future investor can expect a deal like the one Exxon got. He stated that if this was Exxon’s argument at the negotiating table, it should have been a moot one, considering the circumstances.
Last week, Government released the agreement with CGX Resources Incorporated, signed in 2013 by then President Donald Ramotar. Many of its provisions were similar to Exxon’s; though CGX got significantly less blocks than what the