A senior official of United States oil giant ExxonMobil has brushed aside suggestions that the company should renew the current oil contract it signed with the Government of Guyana in 2016.
Responding to questions from the media with regards to whether ExxonMobil will consider renegotiating the oil contract with Guyana, Senior Director of ExxonMobil Kimberly Brassington, while not proving a clear answer, said that the sanctity of the contract has to be respected and it must be done especially in the context of a country that is new to the industry.
According to Brassington, businesses are looking and paying close attention to the business climate in Guyana, hinting that the push for a renewal of any contract may prove negative and could affect prospects for business opportunities here.
While there have been calls for Government to renegotiate the contract with ExxonMobil, the David Granger-led administration has made it clear that the issue has been dealt with already and it will not go back to it.
Just recently Presidential Adviser on Petroleum, Dr Jan Mangal said that Guyana’s contract with the oil giant 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.
In addition to sharing 50 per cent of the net profits—profits declared after the initial investments would have been repaid from any earnings.