‘Wishful thinking’ that Stabroek Production Agreement with Exxon can be changed now – Jagdeo

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Vice President Bharrat Jagdeo on Friday poured cold water on fresh calls for the Government to renegotiate and ultimately change the production agreement entered into between ExxonMobil and the former APNU+AFC Government for the Stabroek Block.

Jagdeo told reporters that it was simply “wishful thinking” that the PPP Government could move to change the agreement now but noted that they are committed to reviewing the agreement with the intent to get more out of it as he made it clear that changes cannot be made at this point.

The Vice President was speaking days after the People’s Progressive Party went ahead with issuing a license for the Payara Development Project, located in the Stabroek Block.

He said while the PPP Government delayed issuing the license as it intensely reviewed the terms of the permit, it could not make any changes to the production agreement which governs all developments in the Stabroek Block.

The former APNU+AFC Government had granted the licenses for the Liza Phase One and Two while the PPP earlier this week approved the license for the Payara Field Development.

Jagdeo says a comparison of the two permits would show that there are major improvements in the Payara License when compared to Liza license.

“There are major changes on both the environmental side and the production side… there are major major improvements and you can see for yourself,” he told reporters.

Jagdeo pointed out that routine flaring is prohibited in the Payara permit while in the Liza permit flaring was permitted because there was no prohibition.

There is also a fine for flaring if it is done.

Additionally, under the Liza permit, there were no costs estimates and details while under the Payara agreement, ExxonMobil has to submit to the government within 90 days the development cost and the operating cost for the Payara project.

“So now we can see the cost and then once submitted we can assess whether those costs are reasonable, that is a new requirement now,” he added.

Jagdeo also pointed out that there is space now for safety and compliance audits where ExxonMobil will give the Government US$2 million to conduct these independent audits. ExxonMobil also has strict directions on local content.

The Vice President also responded to statements by Opposition Leader Joseph Harmon who earlier on Friday said that the license issued by the PPP Government was similar to the one issued by the APNU+AFC.

Jagdeo accused him of being ill-informed and pointed out that the production agreement was already signed and the government still has to operate within the confines of that agreement once it issues licenses for the Stabroek Block.

Jagdeo said the PPP government could not change the financial terms as some persons have suggested and neither could it refuse to issue the license as leverage for changing the production agreement.

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