There is a group of self-righteous people, the naysayers, in Guyana with a preposterous idea. Guyana must do the “responsible” thing – leave the oil in the ground below the sea and not add to the fossil-fuel global warming. Countries have done so for decades and centuries. They got rich and they continue to enrichen themselves, but we are being asked to remain poor by doing the “responsible” thing. Among the naysayers is a group that want to temporarily halt production until we can get EXXON to renegotiate the deal. EXXON has said that will not happen because our government (the PNC-led APNU/AFC government) agreed to give them an iron-clad right to refuse any renegotiation. If we follow these naysayers, it is the same as those who want to leave the oil in the ground permanently.
The choice is stark: the Irfaan Ali-led PPP government is focused on maximizing the benefits from a bad contract to transform Guyana, creating the launching pad to bring prosperity to all Guyanese families, to leave behind our history of being a poor country with poor people. The naysayers want Guyana to remain poor forever, with mostly poor people. Guyana says to the naysayers and the world, we are not going back there.
We can all agree on one thing – the naysayers saw how bad the EXXON deal is only when the PPP took over government in August 2020. Before that they were mostly silent or merely timid in any criticism. Is it because they hate the PPP and, therefore, look for anything to attack the PPP government? Or is it that they feel free and safe under the PPP and were afraid of the PNC-led APNU/AFC government?
That the deal was signed in 2016 and hidden until it was exposed by the PPP in 2018 did not unduly bother them. That a $US18M signing bonus was hidden until exposed by the PPP did not seem unusual and did not bother them. Everyone in Guyana knows which government signed the deal and whose signatures are on the contract. The PPP government inherited the deal. But if one listens to the naysayers, one would assume that it was negotiated and signed by the PPP. None of the naysayers have anything to say about those responsible for placing the albatross around our collective necks.
President Irfaan Ali, VP Bharat Jagdeo and their cabinet have ensured that Guyana exhaust all the opportunities within the contract to maximize the benefits Guyana could get. The Guyana we have today would not have been possible without ensuring that Guyana maximizes the opportunities within the contract. In 2025, electricity rates will be reduced by at least 50%. This will benefit every Guyanese citizen, every Guyanese business and will by itself propel Guyana’s economy. Cost of production for commodities will significantly be reduced making our manufacturers more competitive with their international competition. This is merely one example.
Would be have been able to build a modern, high-rise bridge across the Demerara River were it not for oil? The answer is that without oil, we might have had a new bridge, but not the kind we are now building? Would we have been able to modernize and upgrade to first-world standards our hospitals and schools, if it were not for Oil? The answer is absolutely not. Would we have been able to build new highways, make university free, increase cash grants for our children, build new roads, etc.? The answer is no.
The PPP government has taken a bad deal and make it work for Guyana. Instead of fighting a losing battle, and not allowing Guyana to benefit, the PPP has taken the uneven deal that we were left with and make it work for Guyana. Instead of appreciating what the government has accomplished, the naysayers want the government to bring a halt to extracting oil from the bottom of the sea until we could get a better deal (according to some of the naysayers) or to permanently leave the oil at the bottom of the sea because we need to be responsible global citizens and not contribute to the fossil-fuel based global warming (according to some of the naysayers).
Do you see the trend? They blame the PPP for a bad deal and ignore those who actually negotiated and signed the deal. They blame the PPP for contributing to global warming when for centuries the big boys have been extracting oil, gotten rich and continue to get rich. We must allow the big boys to continue while we do the “responsible thing”. In short, the naysayers want Guyana to remain poor, waiting for handouts now and then. It is preposterous.
But there is a level of sheer hypocrisy being practiced by the naysayers. Has anyone ever heard them call for holding those who are directly responsible for the EXXON deal accountable?
Would naysayers support holding accountable those who negotiated and signed the one-sided EXXON deal? Afterall the PNC-led APNU/AFC government that negotiated the deal left this albatross for the nation to carry. The present government which did not sign the agreement, but is bound by it, has moved to maximize the benefits accruing to Guyana and the Guyanese people as much as possible.
Long before the Irfaan Ali-led PPP government took office in August 2020, the PNC-led APNU/AFC made EXXON’s NO-Objection for renegotiation an iron-clad prerequisite. If EXXON does not agree, there is no renegotiation. This is what Article 32.1 states: “Except as may be expressly provided herein, the Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement without the prior written consent of Contractor.” Can it be more crystal clear?
Note the latest version of EXXON’s position, as regard renegotiation in accordance with article 32.1 of the contract, as stated recently by the President of Exxon Mobil Guyana: “ We have no interest in invoking that Article. As I say, we’ve made US$55 billion worth of commitment to the country. To go back and to undermine the basis of that investment would seriously challenge any future investments.” EXXON’s position has been made pellucid multiple times before, even before President Irfaan Ali was sworn in as President.
This brings me to the one question that has not been asked: should those who were responsible for negotiating and signing off on the contract be held accountable? David Granger was the President; Raphael Trotman who was Minister of Natural Resources was the lead on OIL, Winston Jordon was Finance Minister. The Cabinet which presumably approved the PSA and discerned that the PSA can be signed included Moses Nagamootoo, Khemraj Ramjattan, David Patterson, etc. Should these and others be held accountable? Are they guilty of malfeasance in public administration?
Some have called the PPP government’s approach autocracy – the government is not listening to the small, loud group that demands renegotiation. The renegotiation group behaves as if it is the Irfaan Ali-led government that is responsible for the debacle. When the contract was first exposed 18 months after it was signed by the Granger-led, PNC-controlled APNU/AFC government, these same people were silent. They did not jump on their high-horses and demand that the contract be deemed null and void. Only one person within the present naysayers had talked about the one-sidedness of the contract once it was exposed.
Some renegotiating naysayers think we should not be extracting oil because it adds to global warming and Guyana should do what they deem the responsible thing – remain poor for the sake of the world. These persons want Guyana to leave the oil in the ground, condemn present and future generations of Guyanese to be poor forever, while they are silent about those who have enriched themselves for decades and continue to extract oil with impunity. If that is what “responsible” means, count me out, I do not want to be “responsible”.
The government has, in fact, listened to the concerns. The government took a position that instead of deferring or abandoning economic and social development by stalling or abandoning oil and gas production by a renegotiation challenge which has a probability of success of none to bleak, the country will make maximum use of oil-based revenues to propel development. In the process, the government has and continue to explore all possibilities of extracting more benefits from EXXON and its partners.
The Local Content Act which has been enacted by the PPP government has already generated almost $US1B for Guyanese-owned companies since 2021, with more than $US550M so far in 2021, and created more than 6,000 jobs. The government got EXXON to pay for the infrastructure to bring gas from the oil drills to shore that has the potential to generate as much as 300MW energy and reduce consumer electricity cost by 50% in 2025. The project will also lead to production of cooking gas which will also lead to significant cost reduction for Guyanese families. Further, Guyana will be able to export gas. While EXXON will need to recover its cost, Guyana makes no investment, but owns the gas and the gas industry. In addition, Guyana has ensured that all future PSAs, outside of the Stabroek Block will be guided by better terms for Guyana, including more royalty, reduced investment recovery from annual revenues and EXXON must pay taxes.
If the naysayers want “pound of flesh” for the malfeasance of the bad Exxon deal, then why not demand malfeasance charges against those responsible? If the government makes any move to hold those responsible, the same people who now demand renegotiation will deem Irfaan Ali and Bharat Jagdeo and their government dictators.