Minor changes have been made to the 1999 agreement reached between the then government and ExxonMobil in the wake of the huge offshore oil discovery in 2015.
However only the “salient points” of the contract agreement between Guyana and ExxonMobil will be made public for security and other reasons, Minister of Natural Resources Raphael Trotman said on Thursday.…to continue reading this article, please subscribe.
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However only the “salient points” of the contract agreement between Guyana and ExxonMobil will be made public for security and other reasons, Minister of Natural Resources Raphael Trotman
From a so-called lawyer to OIL specialist,
Minor changes have been made to the 1999 agreement reached between the then government and ExxonMobil in the wake of the huge offshore oil discovery in 2015.
However only the “salient points” of the contract agreement between Guyana and ExxonMobil will be made public for security and other reasons, Minister of Natural Resources Raphael Trotman said on Thursday.
“In so far as full disclosure at this point in time, I think government is of the view that full disclosure would not be to the best of the national benefit or national interest,” Trotman told a media breakfast where his ministry and ExxonMobil provided updates on the nascent oil and gas sector.
“Right now we are prepared to share the salient features of the contract, it is a 50/50 production share agreement…that means that Exxon and its partners will share 50 percent between themselves and Guyana will (have) 50 percent,” he added.
The Minister said that while he was not speaking for government as to a reason why the full disclosure should not be made as yet, he will weigh in and advise President David Granger of the myriad reasons, including the security of the nation.
Guyana has pressed the United Nations for a juridical end to the border controversy with Venezuela which, over the years, has seen Caracas thwarting oil exploration efforts in this country’s waters.
This week, United Nations Secretary General Antonio Guterres appointed Norwegian diplomat, Dag Halvor Nylander as his personal representative “to try to settle the longstanding controversy” this year, failing which the matter will be referred to the International Court of Justice for final settlement.
ExxonMobil’s offshore find in 2015 is also Guyana’s first commercial oil discovery and the country is still in its ante-natal state of developing a fully equipped oil and gas sector.
Trotman reminded that the contract signed with ExxonMobil and government predates the APNU+AFC government’s ascension to office as it was signed in 1999 with the People’s Progressive Party/Civic (PPP/C) administration.
The APNU+AFC Government preserved the contract, only tweaking certain elements but continues to review it given the changes since its signing. The Minister said, “As you know we inherited the contract from the former government in 1999. Government made a decision to look at it but avoid opening the contract in its entirety for negotiations.”
“We didn’t want [it] to go abroad as Guyana is a place where it doesn’t respect the sanctity of contracts and we thought it best [to leave] what we had found. It was not altogether a bad contract… of course 1999 to the date of discovery in 2015 things would have changed,” he added.
The contract for the 6.6 million acres of the Stabroek Block is split with government and operator ExxonMobil down the middle, after cost recovery.
Esso Exploration and Production Guyana Limited is the operator and holds a 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds a 25 percent interest.
Trotman pointed out that even after cost recovery, Guyana would still have a sizeable sum to use towards its development, given the current oil prices.
‘Refinery options ’
Government and ExxonMobil and its partners will also decide what they do with their oil after cost recovery, with both sides making clear that they reserve the right to choose a refinery of their choice.
“The way the contract is written, the government has their share of the oil, we have our share of the oil, CNOOC Nexen has their share of the oil (and) Hess has its share of the oil. So there will be individual liftings, they will go to the tankers and each has the right to move that oil to wherever they want to,” ExxonMobil Country Manager Jeff Simons pointed out.
The Minister of Natural Resources informed that even as Guyana weighs the feasibility of having its own refinery, it has received proposals to refine its oil from Suriname and Trinidad and Tobago. Both countries have said their refineries are underutilised.
“They (Suriname), too, have a refinery, which is operating under par, which raises the question: Should Guyana have a refinery, spend two billion dollars on a refinery and in about twenty years, assuming that all we have is from the Liza, that in about twenty to twenty-five years we have to be looking elsewhere to (get oil) to do some refining?” Trotman questioned.
“Exxon may wish to do some of its own refining, but the Government of Guyana, under the terms of the agreement, can also determine whether it wishes to receive its portion in oil and, therefore, may wish to use the available facilities nearby- either Suriname or Trinidad, or as I said, build one here, but we haven’t come to that decision as yet,” he said.
“In so far as full disclosure at this point in time, I think government is of the view that full disclosure would not be to the best of the national benefit or national interest,”
Border claims is one of the reason the full disclosure of contract will not be revealed,
any thing wrong kp ??
They will want Exxon to deposit Guyana's share of the agrrement into their personal account offshore. Tiefing blackman just like Equatorial Guinea.
Django posted:“In so far as full disclosure at this point in time, I think government is of the view that full disclosure would not be to the best of the national benefit or national interest,”
Border claims is one of the reason the full disclosure of contract will not be revealed,
any thing wrong kp ??
Lots of things don't sound right what is there to hide .Venezuela wants land water and oil we all know that the border issue is lame duck. The are tweaking the contract that the PPP signed with Exxon. The PNC were elected by the people for the people the people need to know what are the fine prints. Trot man is building the framework to hide the proceeds the generals AR rhe Top will share the wealth.Django you are living too far to see the Facts. Or you can't handle the truth.
kp posted:Lots of things don't sound right what is there to hide .Venezuela wants land water and oil we all know that the border issue is lame duck. The are tweaking the contract that the PPP signed with Exxon. The PNC were elected by the people for the people the people need to know what are the fine prints. Trot man is building the framework to hide the proceeds the generals AR rhe Top will share the wealth.Django you are living too far to see the Facts. Or you can't handle the truth.
There is no doubt they will steal some $$$,hopefully the opposition apply some pressure for transparency,then again they are peas of the same pod.
The oil will last for 20 yrs as predicted,i am keeping my fingers crossed the money will be spent to benefit the people.
Django posted:kp posted:Lots of things don't sound right what is there to hide .Venezuela wants land water and oil we all know that the border issue is lame duck. The are tweaking the contract that the PPP signed with Exxon. The PNC were elected by the people for the people the people need to know what are the fine prints. Trot man is building the framework to hide the proceeds the generals AR rhe Top will share the wealth.Django you are living too far to see the Facts. Or you can't handle the truth.
There is no doubt they will steal some $$$,hopefully the opposition apply some pressure for transparency,then again they are peas of the same pod.
The oil will last for 20 yrs as predicted,i am keeping my fingers crossed the money will be spent to benefit the people.
The PNC will set their rigging machinery to guarantee a victory in 2020. The sad thing is that they already give up on agriculture hopefully the country don't go broke before 2020 then the oil companies will be in a better bargain situation and Trot man and boys will settle for the residue.
The youths of the PNC are today clearly criticizing the Older PNC leader for this poor showing of transparency.
KishanB posted:The youths of the PNC are today clearly criticizing the Older PNC leader for this poor showing of transparency.
But in the end, they would rather drink trench water and walk bare shirt but will still vote PNC.
Django posted:kp posted:Lots of things don't sound right what is there to hide .Venezuela wants land water and oil we all know that the border issue is lame duck. The are tweaking the contract that the PPP signed with Exxon. The PNC were elected by the people for the people the people need to know what are the fine prints. Trot man is building the framework to hide the proceeds the generals AR rhe Top will share the wealth.Django you are living too far to see the Facts. Or you can't handle the truth.
There is no doubt they will steal some $$$,hopefully the opposition apply some pressure for transparency,then again they are peas of the same pod.
The oil will last for 20 yrs as predicted,i am keeping my fingers crossed the money will be spent to benefit the people.
The money will be spent to benefit the people .... you mean Sophia and Linden and where ever black people live .
Imran posted:The money will be spent to benefit the people .... you mean Sophia and Linden and where ever black people live .
I would not worry, more money in the hands of black pnc supporters will be good for the economy as spending will increase. The downstream effect.
I don't see the AFC/PNC boys complaining about transparency anymore.
yuji22 posted:I don't see the AFC/PNC boys complaining about transparency anymore.
What difference would it make? You just want a chance to tell em they should shut up an eat Dhall with hot pepper.
What are the implications of this statement:
“The way the contract is written, the government has their share of the oil, we have our share of the oil, CNOOC Nexen has their share of the oil (and) Hess has its share of the oil. So there will be individual liftings, they will go to the tankers and each has the right to move that oil to wherever they want to,” ExxonMobil Country Manager Jeff Simons pointed out.
I always thought that ExxonMobil would extract the oil, ship it and sell it and THEN give the government a cut of the net proceeds. The statement above looks like Guyana would be responsible for transportation and finding markets for the oil.
For those familiar with the commodities markets is it a big deal for Guyana to find markets or everything produced will definitely be sold? This question also apply to the end product if Guyana gets the oil refined someplace.
VVP posted:What are the implications of this statement:
“The way the contract is written, the government has their share of the oil, we have our share of the oil, CNOOC Nexen has their share of the oil (and) Hess has its share of the oil. So there will be individual liftings, they will go to the tankers and each has the right to move that oil to wherever they want to,” ExxonMobil Country Manager Jeff Simons pointed out.
I always thought that ExxonMobil would extract the oil, ship it and sell it and THEN give the government a cut of the net proceeds. The statement above looks like Guyana would be responsible for transportation and finding markets for the oil.
For those familiar with the commodities markets is it a big deal for Guyana to find markets or everything produced will definitely be sold? This question also apply to the end product if Guyana gets the oil refined someplace.
You are correct. Guyana will have to invest in oil tankers and then ship to refineries pay for the process then find market for the finished product. Marketing the product is where the thieving is going to happen
Pay some of the money into off shore banks and a little bit come home to feed the locals.
LETTER TO THE EDITOR - On twitter: @Malcolmwat81
Guyana on path of having Governments of absolute economic and political powers.
If you look at most “frontier countries”, which are countries that have vast wealth of untapped natural resources but lacks the ability to extract and process those resources on its own. These countries would then go into partnerships with multinationals, such as oil and mining companies.
Guyana is deemed a “frontier country” and there are few things that happen to frontier countries that we must be aware of. All or most of the investments to extract and process our oil is coming from the oil company and not the state.
This is an investment and therefore there must be a return on investment at a very high profit margin. This simply means that the oil company now owns most of the revenues coming from the oil and the country will get as very little as possible. This plays in favor of the company, since the country will remain economically weak while the company gains more strength.
The political system must be at the disposal of the oil company at all cost, since it is crucial to the return on investment. If the Government is not in full agreement with the company, the company will foresee the risk of losing leverage to a people empowered Government and thus may be forced to give the state a bigger piece of the pie. This does not mean the Government will not have power, but only the Government will have the power. The people and its democratic system will be completely useless.
The Puppet Government must remain in power for a very long time by any means necessary. This is done my ensuring that the Government is fully financed and equipped to control the people by becoming the absolute economic and political power in the country. Therefore the people are forced to depend on it for everything that means something to them. This is the theory of dependency that renders the people powerless and the few in control with absolute power.
Nigeria, Equatorial Guinea, Papua New Guinea, Bolivia, Venezuela and many other countries have either gone through or currently going through this form of Capitalist criminality that have left the people in poverty while the few puppets to the company brand themselves demigods of the land.
In the case of Nigeria, the military and the state apparatus joined forces to keep the people under control while serving the needs of companies like Shell. Shell has even been named in aiding the assassination of political leaders who have defended the rights of the people in Nigeria.
In Equatorial Guinea, the country is led by a super elite family of the President and his children, controlling every aspect of the extractive sector and the state apparatus to ensure the oil company profits. Guinea boasts the highest GDP growth in Africa, while more than 75% of their people live below the poverty line.
There is a large amount of natural gas in Papua New Guinea. The people are forced off their lands that they lived on for thousands of years while getting little to nothing for their lands, while the Government gives big promises but nothing else.
Guyana seems to be heading down that same path and the signs are clear; we see a Government rising to power with empty promises and propaganda of division to remain in control. They expand taxes to drain the economic power of the people, therefore making them dependent on the state economic machinery.
We are seeing the establishment of special units to conduct investigations supported by military resources. This will be followed by mandates in the future to suppress freedom of speech and people who are in opposition to their rule.
You can see that by expanding the net of taxes across a wider range of economic activities, the Government will be in a position to suck back all the monies from oil and the correlating economic spin offs in the country.
What is even more important to note is that Guyana is not seen as a partner of parity at the negotiating table, since they bring nothing of value to the company in their eyes. The company actually has positioned themselves as a superior entity in every way. Their negotiating skills are superior, they have the political and wealth capital to control Guyana, which means we are viewed merely as a piece of farm land with a few underlings to feed and keep quite.
There is a very small window to curb this potential disaster and that time is now. In a few years or less, we will lose any opportunity to gain back our rights to gain from our natural resources.
Movements like the protest against the Parking Meters are where we need to build on to keep the pressure on this or any future Governments from taking us down a path of hopelessness.
Malcolm Watkins.
Very good read. The PNC has sold the country to the lowest bidder USA.that's in return of winning the election.
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