Nothing wrong with reviewing former Govt’s agreement – Finance Minister

ExxonMobil contract

The review of the contract signed by the former People’s Progressive Party/ Civic Government with ExxonMobil for oil exploration in Guyana’s Exclusive Economic Zone, is natural and is in keeping with the fact that the circumstances have changed since the signing of the first agreement, Finance Minister Winston Jordan said.

The Minister told the Government Information Agency (GINA) in a recent interview, that a review does not necessarily have to result in a change to the terms and conditions of a contract; rather it serves to bring a

greater understanding of the contract details. “A review does not mean changes but it can involve changes,” said the Minister.

Minister Jordan insisted that the request for a review of the contract was Government’s way of ensuring Guyana gets the best possible deal from the extraction of oil when it begins.

“At the end of the day… you have to say whether we are doing what is best for the interest of the national population and I can tell you we are indeed doing that. A 2009 agreement or 2006 agreement or whenever the agreement was originally made, was at a time when there was no discovery of anything, now there is oil,” Minister Jordan said.

The contract was signed some 17 years ago and Minister Jordan said this is a good reason for such review. “You can review the 1999 agreement or the 2006 agreement, it is 2016, the circumstances have changed, and oil has now been found.”

In May of 2015, ExxonMobil declared the find of substantial oil deposits in its exploratory Liza Well offshore Guyana. It has since completed drilling of a second well which revealed total deposits estimated to be in excess of one billion barrels of oil.

The Minister pointed out that it is any government’s right to seek a review of contracts when governments

change.

He added, “You can’t get a better deal if you didn’t review. In the first place we weren’t abrogating any agreements or anything, we were just mainly asking for a review, and in the spirit even Exxon agreed.”

According to the Finance Minister, the company is in the process of drilling a third well, Skipjack, approximately 19 miles from the second Well.

Questioned about the sovereign wealth fund, Minister Jordan said the Government is receiving much needed help from nationals and non-nationals towards its establishment.

“I believe by the end of the year we will be in a good position to have a working draft, I believe … we are being assisted by a number of countries and agencies -Commonwealth Secretariat, United States of America, and Canada; they are all assisting us in that particular area so we are getting some help. Concerned Guyanese have also been adding their lot in terms of offering help… I got an email from a very outstanding Guyanese who was a Rhodes Scholar and he has offered also to help us with the sovereign wealth fund. He has put down some interesting ideas and I am to get back to him on him staying on board to help us to shape that draft into something that would be acceptable to us,” the Minister explained.

However, Opposition Leader Bharrat Jagdeo, had expressed concerned about what this review entails in the absence of any concrete reasons put forward by the Government.

Jagdeo said there are a number of key questions that needed to be answered by the A Partnership for National Unity/Alliance For Change (APNU/AFC) Administration regarding the review, including Trotman’s statement that this is in an effort to “get closer to ExxonMobil.”

“Does this mean that they are going to give out more concession to ExxonMobil? What does this review mean? Who is going to oversee this? Do we have international lawyers who have dealt with the large companies like ExxonMobil, who will have hundreds of lawyers on their side that are well versed in petroleum law, etc? Do we have advisors that can advise on best practices in contracts etc?” Jagdeo asked, adding that “My fear is that the answer is no.”

The trained Economist said he was fearful of Trotman’s involvement in the negotiations, since the Minister lacks the technical and other expertise to negotiate a proper agreement.

The former President, under whose presidency ExxonMobil was granted an exploration licence, has warned that any bad agreement entered into with the oil exploration company will be reviewed once his party is returned to power.