World-class negotiators needed for future oil contracts – Private Sector

The Private Sector Commission (PSC) has suggested government hires world-class negotiators for future oil contracts, given what it said were “concerns” over the petroleum agreement with ExxonMobil, Hess Corporation and CNOOC and the Government of Guyana.

“We… expect that, for all other blocks offshore, the Agreements with operators/contractors will consist of provisions that will ensure Guyana receives more royalty, rents, training and development for Guyanese and better local benefits for all Guyanese through the enlisting of the services of world class negotiators who can competently negotiate with major oil companies,” the PSC said in a press statement Saturday evening.

The Commission found that the agreement “is sadly lacking” in benefits for local businesses and suggested that more could have been done to ensure this.

The PSC was concerned too that ring-fencing provisions have not been addressed and that Guyana would have to bear the costs were there to be unsuccessful exploration.

The Commission noted that Guyana does not have the right to re-negotiate the terms of the Agreement.

“We are concerned, since this Agreement encompasses the entire Stabroek Block, an area of 6.6 million Acres of water with 3.2 billion barrel of equivalent oil (BOE) so far.

“With the projected massive oil discoveries the Commission believes that there should be increased flexibility given to the Government of Guyana, to ensure a fair and equitable deal on both sides,” the PSC declared.

The Commission bemoaned what it said was the lack of anything in the agreement that suggests that the giant oil find would reduce the cost of energy; it said energy cost limited what local businesses can do to expand and grow.

“There is nothing in the Agreement to indicate that with Guyana owning such large oil reserves, this would translate into reduction of the costs of energy to Guyanese,” the PSC stated.

ExxonMobil Corporation announced Friday positive results from its Ranger-1 exploration well, marking its sixth oil discovery offshore Guyana since 2015.

The Ranger-1 well discovery adds to previous world-class discoveries at Liza, Payara, Snoek, Liza Deep and Turbot, which are estimated to total more than 3.2 billion recoverable oil-equivalent barrels.

The Government, in the statement, said it remains committed to all efforts for the safe and efficient development of the offshore Guyana basin.