Guyana gained more from renegotiation with ExxonMobil – Country Manager Henson

DPI, Guyana, Thursday, December 28, 2017

The government and people of Guyana received more in benefits from its 2016 renegotiation of the ExxonMobil oil exploration contract, according to Country Manager of the oil giant, Rod Henson.

“Both parties could have lived with the existing agreement at the time, but it was evident after our discovery that there were benefits to both parties if we relooked at the agreement. It secured a range of additional benefits to Guyana for work commitment, training, local content and increased fees and payments,” Henson explained.

Under the new agreement the current administration was able to increase the annual rental fee from $240,000 per year to US$1M per year, royalty from zero percent annually to two percent annually, training fee from US$45,000 yearly to US$300,000 yearly and an additional US$300,000 yearly for social responsibility and environmental support.

According to Minister of Natural Resources, Raphael Trotman, the 2016 agreement is an improvement on that signed by the former People’s Progressive Party (PPP) government in 1999 and does not represent a full fledge negotiation of its content.

“We sought to maintain the exact proportions of …. that was given by the PPP/Civic we did not add nor deduct from what was given by the PPP. It was not a negotiation that we had a long back and forth over every clause, but we did make some minor adjustments,” Minister Trotman told a briefing of government officials and civil society stakeholders earlier Wednesday at the Ministry of the Presidency.

In addition, Henson said that the agreement is globally competitive for countries at similar stages of exploration, “yes, we had discovered the Liza field, but we had not fully appraised its size that was only one field without proven production and we also had the skipjack dry hole in addition to multiple other companies’ unsuccessful exploration attempts,” Henson explained

Citing the risks involved in such exploration and hinting at recent criticisms that the country is getting “too little” from the deal, the Exxon Mobil country manager said, “I think its unrealistic or unreasonable to compare this agreement to those achieved in more matured oil and gas countries like Brazil, more matured countries in West Africa, in Canada or United States. It’s even more so to cherry-pick single elements of an agreement and do that. you have to look at the entire agreement and the conditions at the time the agreement was made.”

Meanwhile, Henson said 70 percent of its office staff and 50 percent of its contractors locally are Guyanese while it has established a Centre for Local Business Development in Georgetown.

The Centre is to assist Guyanese businesses to build their capacity and improve competitiveness, provide mentoring, coaching and access to financial support, as well as information on safety, technical standards and procurement opportunities to furthering the capabilities of local Guyanese businesses.

 

By: Kidackie Amsterdam

 

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