By Devina Samaroo
Minister of Business, Dominic Gaskin today condemned the daily onslaught against the oil contract between ExxonMobil and the Guyana Government, noting that “we can’t play hardball with investors.”
While conceding that there is “a lot of room for improvement” in the agreement, Gaskin expressed that “it is a decent deal” given that there was no obligation on the part of the US supermajor to change the terms of the contract which was initially signed in 1999.
In fact, the Business Minister agreed with the decision of the then People’s Progressive Party (PPP) administration to satisfy ExxonMobil’s requests under the 1999 contract.
“My views transcend politics, I don’t blame the previous Government for the contract that existed, it would not have been prudent for them at that time to demand more,” Gaskin stated at the first in a series of oil and gas summits being organised by Guyana’s Private Sector Commission (PSC) which is being held at Duke Lodge, Kingston, Georgetown.
The Business Minister reasoned that ExxonMobil, in 1999, probably would have taken its investment elsewhere if the Guyana Government made major demands at a time when there was no guarantee of oil discoveries.
He noted that now, the paradigm has changed, and the Guyana Government is in “a much stronger position to negotiate the remaining blocks.”
The Government recently announced that it will be contracting the services of an international firm to advise on what to do with the remaining blocks.
In further defending the ExxonMobil contract, Gaskin asserted that in the first year of oil production, the country will generate a similar value of revenues as it did in the gold industry in the last eight years.
According to the Business Minister, Guyana earned approximately US$300M in the last eight years from an industry that has existed for decades while in 2020 alone, the country is forecasted to earn roughly the same.
He noted too that in the following years, the earnings will only increase. In this regard, Gaskin posited that this is not “chicken feed”.
“Could we have gotten more? We can always get more and get less but we can’t want to play hardball with investors,” Minister Gaskin stated.
As such, he deemed the criticisms against the contract as “plain nonsense.”
“There is nothing ridiculous or lopsided about the contract,” he reaffirmed.
The Kaieteur News media outlet publishes articles on a daily basis criticising the oil deal and in some cases showing comparisons of ExxonMobil contracts with other countries.
One of the articles highlighted that the Government of Ghana and ExxonMobil recently entered an agreement whereby the West African country will be getting 10% royalty.
But Gaskin contended that the instigators need to paint the full picture.
The Business Minister clarified that, among other things, Guyana and Ghana have two different models of contract, whereby Ghana contributes to operational cost and gets no profit but taxes from the oil sold.
