President says no prospect of intention to review Exxon oil contract currently

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President David Granger, on Wednesday said that there is no immediate intention to to review the contract between Guyana and ExxonMobil, indicating, however, that the matter is before Cabinet.

President David Granger

Speaking to members of the media at the conclusion of the swearing in ceremony for the new Appellate Court Judge at State House yesterday, the Head of State said that the matter is one that must be approached carefully.

“These matters are before Cabinet and it depends on what determination Cabinet arrives at but the Contract is an agreement between two parties and these things that have to be approached very carefully. There is no prospect at the present time that it is the intention of Cabinet to review it, but as I said it is before Cabinet,” he said.

Meanwhile, Minister of Natural Resources, Raphael Trotman, in an invited comment, said that the Government is committed to receiving the best possible advice as it works to develop the oil and gas sector, noting that the Administration is in receipt of support from a number of agencies.

The President’s comments comes on the heels of criticisms from many experts who after perusing the released petroleum agreement strongly believe that it should be renegotiated since according to them the contract is more in favour of ExxonMobil than Guyana.

Just recently Presidential Adviser on Petroleum, Dr Jan Mangal, at an event held at the University of Guyana said that Guyana’s contract with oil giant ExxonMobil can be renegotiated and the royalty Guyana is receiving is too low compared to global standards.

Under the renegotiated 2017 agreement Guyana receives two per cent royalty on earnings from ExxonMobil’s oil sales while the US oil giant would not be required to pay taxes on its share of the profits.

Moreover, in addition to sharing 50 per cent of the net profits—profits declared after the initial investments would have been repaid from any earnings.

According to the President’s Petroleum Adviser that is low compared to global standards. He also raised concerns about the system used to negotiate that agreement and also the expertise of the persons doing the negotiating.

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