– ‘If the law in a particular country requires it, we follow the law’
By Alexis Rodney
United States’ (US) oil and gas giant ExxonMobil has laid bare its position on what is currently seen as a controversial production sharing agreement signed with the Government of Guyana, and has stated that its mission remains to support transparency initiatives here.
The oil company has said that while it does not generally make details of its contracts public, should the law of the respective country in which it operates requires that, it simply adheres to the law.
After being granted its production licence from the Government of Guyana, ExxonMobil has recently been in the news, but the pressure has not been on Exxon, but on the ruling Administration, over its reluctance to release details of the agreement for public scrutiny.
While calls have been made in this regard from various quarters, Government has maintained that the contract could not be made public, as it could breach several safeguards, security being one of them.
Speaking to this media group on Thursday, ExxonMobil’s Senior Director, Public and Government Affairs, Kimberly Brasington, acknowledged the popular public discourse about making public the terms of the Production Sharing Agreement (PSA) between ExxonMobil and the Government of Guyana.
She said it is an emotional and important discussion, and speaks to the critical issues of transparency and trust.
Brasington said ExxonMobil is committed to the highest standards of business conduct and anti-corruption wherever it operates, and that includes transparency.
According to her, in the many countries the oil company operates, petroleum agreements are made public as part of the country’s Extractive Industries Transparency Initiative requirements (EITI), or the law.
With respect to publishing entire contracts, she said ExxonMobil does not generally disclose contracts and private agreements. However, if the law in a particular country requires it, “we follow the law”.
“In Guyana, ExxonMobil will continue to work with the Government on new reporting rules, in order to support transparency. We have been an active participant in EITI since its global inception in 2003; and in Guyana, our country manager, Rod Henson, is a primary member of the Guyana EITI Multi-Stakeholder Group, representing industry.
The Guyana EITI recently submitted formal application for Guyana to become an EITI candidate country. “Within this initiative, payments made to the Government will be reported, reconciled, and made public, to provide civil society with factual data,” Brasington posited.
She said ExxonMobil supports effective transparency initiatives. “we believe that in order for a transparency initiative to be successful without discouraging future investment, it must pass a couple of tests: one, it should apply to all companies in the extractive industries to maintain a level playing field – including all oil & gas contracts, mining contracts, and forestry contracts.
And two, commercially sensitive and proprietary information must be protected,” she stated.
According to her, democratically elected officials have all the contracts and agreements; these are not secret. However, the number of persons that see them is limited to those who hold a responsibility as part of their job to negotiate, monitor, and audit the contracts.
Government had, earlier this year, entered into a contractual 50-50 Production Sharing Agreement with the Texas-based oil company which allows Exxon and its partners to recover the cost invested in the offshore production before sharing of the profit oil is done equally.
Guyana is still hoping to — by year end — join, the EITI: an international standard that seeks to provide consolidated information on a country’s extractive sector; reconcile key revenue flows paid by companies with those received by Government; and assesses how the revenues are expended on behalf of the people.
Membership of EITI means that Guyana will have to voluntarily adhere to the 12 principles of the EITI standards, which endorse corporate social responsibility, encourage sharing of information, reveal beneficial ownership, and promote revenue transparency.
Exxon and its partners, Hess Corp and CNOOC Nexen, made its significant oil find back in 2015, after drilling the Liza Field in the Stabroek Block located about 120 miles offshore Guyana. The oil company is currently in the developing phases of the Liza field, and oil production is projected for 2020.