‘No prospect’ at this time to review oil contract– President

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The Government has no intention at this time to review the petroleum agreement with ExxonMobil and its partners, President David Granger has stated.

“These matters are before Cabinet and it depends on what determination the Cabinet arrives at.

“But the contract is an agreement between two parties and these things have to be approached very carefully.

“There is no prospect at the present time that it is the intention of Cabinet to review it,” the President told reporters at State House Wednesday.

Following mounting pressure by the public, heightened by a leaked document exposing a US$18 million signing bonus, the government on December 28 last release the petroleum agreement between itself and Exxon Mobil and its partners CNOOC Nexen and HESS.

ExxonMobil holds 45% interest in the Stabroek oil block, which is located some 100 miles offshore Guyana and measures 6.6 million acres. Hess holds 30% interest and CNOOOC Nexen holds the other 25%.

According to the agreement, the companies have permission to operate for an initial four-year period with two extensions which will both last for three years.

The agreement provides for the companies to relinquish 20% of the contract area at the end of the first renewal period.

The Minister responsible for the petroleum sector will have to review the companies’ exploration work programmes and budgets, development plans and audit rights. The Minister will also be responsible for ensuring accounting procedures are enforced.

The Government may request that the companies market the Government measured share of crude with an agreed process to negotiate marketing fees that are competitive, fair and transparent to the government.

According to the agreement, the company will pay US$1 million in an annual fee and will provide US$300, 000 for training and US$300, 000 for corporate social responsibility projects.

The President’s Petroleum Advisor Dr Jan Mangal has said that the 2% royalty Guyana will receive, as well as the tax regime granted to Exxon and its partners, are below international norms.

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