Monday, May 20, 2024
spot_img
HomeNewsCaribbean NewsGuyana committed to maximising benefits despite lopsided Exxon contract, says attorney-general Nandlall

Guyana committed to maximising benefits despite lopsided Exxon contract, says attorney-general Nandlall

GEORGETOWN, Guyana (DPI) – Although the terms of the existing contract with oil giant ExxonMobil are not ideal, attorney-general and minister of legal affairs, Mohabir Anil Nandlall, SC, said the government is bound to the legal agreement and is striving for the best outcomes for the nation.

Speaking with the Department of Public Information (DPI) on Saturday, the AG recalled the ‘nefarious’ environment in which the 2016 agreement was signed.

The fiscal terms of the 2016 Product Sharing Agreement (PSA) outline that Guyana receives two per cent of all petroleum produced and sold as royalty, with a 75 percent cost recovery ceiling. According to the legal affairs minister, in the first place, a prudent government would have employed the intellect and expertise of industry experts to assist in the negotiation process.

However, he said this was not done by the previous APNU+AFC Coalition Government, and the agreement was negotiated and signed by the subject minister.

“We don’t have on record, and no one has ever placed on record any expert advice, any expert service sought or offered.” He even reminded that the contract was signed without prior public consultations or announcements to the National Assembly. “Not only did they sign the contract, they hid it from the Guyanese people. We were not even told in the parliament that they are negotiating this contract. No consultations of any kind were held…the people of Guyana were kept in the dark. A year after the contract was signed, it was made public after information was leaked and…We discovered the contract,” minister Nandlall stressed.

Once discovered, the attorney-general recalled with dismay that a US$18 million signature bonus was granted to the then government, which was not made public, or deposited in the Consolidated Fund as the constitution stipulates.

“The constitution of Guyana says that all monies received by and on behalf of Guyana must be deposited in the Consolidated Fund, and can only be withdrawn from the consolidated fund through a parliamentary process. This money was never deposited in the Consolidated Fund, and was never reported to the parliament,” the minister emphasised.

Against this backdrop, he stated that the 2016 contract also prevents any attempts by the government to alter or rescind its terms without the consent of the contractor.

“We didn’t sign this, but we are bound by it,” the attorney-general emphasised.

Meanwhile, recognising that private investment is a critical driver of economic growth in Guyana, the AG said scrapping the 2016 agreement would communicate to foreign investors that Guyana is not a stable environment for investment, negatively affecting its economic growth.

Today, Guyana is one of the most sought-after investment destinations, according to Minister Nandlall, and this speaks volumes about the government’s efforts to cultivate a stable, enabling economic environment.

“You are seeing investors here from all parts of the globe. Right now, we have about 10 five-star branded hotels, all under construction. Do you think these investors, who have hotels all over the world, would have come to Guyana if they were not satisfied that there is stability, that there is a government that will honour the law and comply with its contractual obligations?” the attorney-general reasoned.

Foreign investments such as these promote modernisation, and job creation, among other benefits.

Importantly, since assuming office, the government has remained keen on making the best of the situation and fostering opportunities for growth and development for all Guyanese.

These measures include the Local Content Act, which lays out 40 areas in the services sector that oil and gas companies and their subcontractors must procure locally.

Already, the act has led to the employment of over 6,000 Guyanese, and is undergoing a comprehensive review to tackle existing loopholes.

In addition to this, the government has crafted a new model PSA which includes a 10 percent royalty rate and 65 percent cost recovery ceiling. Already, countless opportunities are opening up for training in the oil and gas arena, to ensure Guyanese are qualified to take up key positions in the sector.

spot_img
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

spot_img
spot_img
spot_img

Caribbean News

APEC GDP expands to 3.5 percent in 2023: Uncertainties loom large

By the APEC Policy Support Unit AREQUIPA, Peru - APEC’s gross domestic product grew by 3.5 percent in 2023 compared to 2.6 percent in 2022....

Global News

On the inauguration of president Lai Ching-te and vice president Hs iao Bi-khim of the Republic of China (Taiwan) – May 20, 2024

By Jin-Ling Chen, Director General Taipei Economic and Cultural Office in Toronto TORONTO, Canada - The following is a statement from Jin-Ling Chen, Director General, Taipei...