Dr. Valerie Marcel, researcher at think tank, Chatham House.
February 6 2020
Dr. Valerie Marcel, a researcher at think tank Chatham House, has criticized the recently published Global Witness report on Guyana’s oil agreement with ExxonMobil.
In a series of tweets on Wednesday, Dr Marcel, who was part of a Chatham House visiting mission to Guyana in 2017, questioned the timing of the report’s release, just mere weeks before general elections in the South American country.
The Global Witness report entitled ‘Signed Away: How Exxon’s Exploitative Deal Deprived Guyana of up to $55 Billion’, while noting it found no evidence of illegalities, called for investigations to be conducted on those responsible for signing the Production Sharing Agreement with ExxonMobil.
The Global Witness report said, “Guyana is set to lose out on up to US$55 billion from the Stabroek license – an average of US$1.3 billion per year in a country with an annual budget of US$1.4 billion, according to a new analysis.”
Guyana’s revenue take pegged at 60% as production set to hit 1.2 million bpd – Rystad Energy
The report said to get its deal, Exxon employed aggressive and rushed negotiating tactics while Guyana’s negotiators were inexperienced, acted against expert advice, and underplayed the country’s strong bargaining position.
Reacting to the report, the Chatham House researcher tweeted; “First, just two weeks ahead of a crucial election, it is opportunistic, irresponsible and ultimately destructive to throw this bomb into the fray…This election matters particularly because it is the first following oil discoveries. It is a tense election that pits the incumbent coalition government against the [PPP/C].”
Dr. Marcel noted that this election will decide who gets to rule with the sudden influx of production revenues. She said the report was not even-handed in its treatment of the negotiation of the two agreements with Exxon – one signed in 1999 by the PPP/C and the other by the coalition in 2016. “In a context fraught with disinformation and innuendo, this report adds fuel to the fire but does not provide clarity,” she said. “It insinuates conflicts of interest with regards to Minister Trotman but does not demonstrate them. It argues that a trip to Houston (unethically) paid for by Exxon caused Trotman to negotiate poorly. That’s pretty unconvincing. Global Witness should have stuck with an assessment of the deal itself,” Dr. Marcel tweeted.
She is of the view that while Global Witness “rightly points to Exxon’s heavy-handed techniques,” their report does not “deliver the goods” in terms of proving how Exxon exerted pressure in the low-capacity government that was completely new to the sector.
Guyana, she said, is not unique in struggling to assert itself against a powerful company, “which is why the members of the New Petroleum Producers Discussion Group coach each other on how to handle these interactions.”
Dr. Marcel called it laughable and naive that the report suggested that the United States Department of State should bring Exxon back to the negotiating table with Guyana, noting that this US government department has a mandate to protect the interests of the United States, not Guyana’s.
On Tuesday, the Guyana government issued a statement rejecting the report and calling it opportunistic and agenda driven. The government has been reliant on international bodies such as the Commonwealth Secretariat, Chatham House and the New Petroleum Producers Discussion Group in their thrust to build capacity in the oil and gas sector especially in the legal and regulatory areas.
Dr. Valerie Marcel led energy research at Chatham House from 2002 to 2007. She became an associate fellow in 2007, based in Dubai and Toronto before returning to London in 2014. She is project lead for the New Producers Group, a South-South knowledge-sharing network of 31 emerging oil and gas producer countries of which Guyana is a member.
