No long-term benefits to renegotiating Guyana’s oil contracts

Dear Editor,
There has been a lot of talk about renegotiating our oil contracts. I have noted that only a few of these discussions speak to one of the most important aspects of the discussion, i.e. our geo-political situation.
Our current geopolitical situation is something that many of us forget when making these arguments, and it is perhaps the most crucial element in this entire scenario. For clarity, I’m referring to the unfounded claims of our aggressive neighbour.
There is no single solution to stopping Venezuela’s territorial claims on Guyana, but there are several actions that Guyana can take to assert its sovereignty and protect its territorial integrity. While stopping Venezuela’s territorial claims on Guyana would require a multi-faceted approach that involves diplomatic engagement, legal recourse, strategic alliances, economic development, and military readiness, one proves to be more material than the others. Having US economic interests in Guyana is one of the best deterrents to Venezuelan aggression.
We should always remember Kissinger’s statement: “There are no permanent enemies, and no permanent friends, only permanent interests”. Should we renegotiate our contract and companies operating in Guyana no longer find their investment feasible, lose confidence, or no longer find us as a worthy investment destination and they all pull out slowly, would we reasonably expect protection from allies?
There would be no interest to protect, and we would be left to our own devices for a few more dollars. Would it be worth it then? Would the few more dollars satisfy the myopic? Is renegotiation a strategic decision that is worth those risks? Not at all, in my opinion. What happens when our most influential ally is gone?
The agreements surrounding Guyana’s oil, as it is, are pretty good, given all our circumstances. But we must not forget one duty of the state is to honour commitments/agreements regardless of which administration made them. Reneging on these contracts will make all investors lose confidence in our country, and we will lose significantly, now and in the future.
In fact, when Venezuela was at its peak, and was one of the wealthiest countries in the region, it made a decision that could be considered a catalyst for its downfall. Nationalisation in 2007, the exit of Exxon, and mismanagement led to a decrease in the per capita income, after an initial high. We all know what the economic reality of Venezuela is these days, and all of this occurred in a little over a decade.
Renegotiating an existing oil contract in Guyana has several disadvantages, including harm to investor confidence, legal complications, delays in production, reputational risk, and of course a loss of one of our most influential allies. Does anyone still think we need to renegotiate? I hope not.

Regards,
Anil Sukhdeo