It took a scandal over the US$18 million signing bonus to force the Government to release a 72-page document outlining the petroleum agreement between the Government and three companies that will be extracting an estimated 2.7 billion barrels of oil offshore Guyana.
Before publishing the contract on the website of the Department of Public Information, the Government hosted a briefing session with ExxonMobil, for the benefit of various stakeholders, including labour unions, civil society, and the business community.
The document confirms that the government received a US$18 million bonus and it also confirmed a royalty of 2% royalty and a 50/50 profit sharing between the government and the oil companies after costs are recovered.
Ever since a letter was leaked to the press revealing the signing bonus, there have been suggestions that Guyana should have received more. However, Minister of Natural Resources, Raphael Trotman suggested that the focus should be more on how the resources would be spent.
“It is sometimes bemusing to understand why there is this clamor for more money when in fact, we should be more concerned about how are we going to manage this resource, being less than a million, how are we going to protect this resource because there are going to be others who will want to come and share it with us, sometimes not by choice but by force. So those are the primary concerns of the Government,” the Natural Resources Minister said.
The Opposition Leader and opposition parliamentarians were invited to the meeting but they boycotted the event.
Trotman pointed out that the 2016 contract has seen limited changes from the contract entered into by the previous PPP administration. He highlighted the importance of establishing a lasting relationship with ExxonMobil.
“Given our relative under-development and our relative inexperience, we should try to stabilize our relationships rather than go out and court 15 and 20 companies to come into our waters and develop the resource, we should try to manage what we have discovered, build better relations with the company that has made the discovery and make that a long-term objective,” Minister Trotman told those gathered.
He said when oil begins to flow from the Liza well, Guyana would be receiving roughly US$1m per day or US$300m per annum.
The contract also outlined tax exemptions for ExxonMobil and its partners, China National Offshore Oil Corporation Nexen and HESS.
ExxonMobil said it is on course to begin oil production in the first quarter of 2020.