The Alliance For Change which is part of the APNU+AFC coalition believes that the announcement by Vice President Bharrat Jagdeo of improved terms and conditions for future oil blocks amount to a sham and a ploy to shift the conversation of renegotiation of the current contract with ExxonMobil and its partners.
During a press conference today, AFC executive member, Dr. Vincent Adams said the government is creating an unfair playing field by leaving the current ExxonMobil in place as is, while on the other hand, it is saying that other investors must face higher royalties and taxies.
Dr. Adams opined that ExxonMobil and its partners are being protected by the Guyana government.
“All this gimmick is just to get away from the fundamental principle which is to have an open and free competition. What they have done is shut out and protect ExxonMobil with these new terms and create an unfair competition in the sector,” Dr. Adams said.
The former Head of the Environmental Protection Agency said the issue of the oil sector must now move beyond politics and all political parties should come together to get the best for Guyana.
He argued that with the current arrangement, Guyanese are not getting the best from the deal.
He believes that other oil companies will frown on the deal, owing to the fact that the largest oil blocks operator is paying less.
“Let both the Opposition and government come together and come up with what is best and to simply ensure that this new terms announced are spread across. What is good for future contracts must be good for the current one,” Mr. Adams said.
Yesterday Vice President Bharrat Jagdeo announced that the Government is preparing to auction 14 oil blocks under an updated Production Sharing Agreement (PSA) Model that would see Guyana receiving a royalty rate of 10% instead of 2%. In addition, the 75% cost recovery will be dropped to 65%. The sharing of profits after cost recovery will remain 50/50 between government and contractor. And a corporate tax of 10% will be instituted.
“The problem is the government has never even approached Exxon to change the current contract. Before the elections they were saying how bad the contract is and what is not, now they are saying but sanctity,” Adams noted.
AFC Leader Khemraj Ramjattan and AFC executive Member, David Patterson also called on the government to institute the new terms to ExxonMobil.