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ExxonMobil oil contracts are a legal form of highway robbery – Glenn Rall tells the Financial Times
Kaieteur News publisher Dr Glenn Lall is interviewed by Financial Times Energy Editor Jamie Smyth
…Routledge believes publishers have political ambitions
Kaieteur News – “The oil deal we have is legalized highway robbery.” This is how Mr. Glenn Lall, publisher of Kaieteur News, enthusiastically described the 2016 Production Sharing Agreement (PSA) in an interview with the Financial Times, one of the largest media outlets in the United States.
In an article published on Tuesday, the Financial Times reported that Lal criticised the government and opposition parties for their mishandling of relations with oil companies and argued that Guyanese were being offered “a piece of cake”.
Lal also noted that Exxon, the oil industry and the government are increasingly taking concerted action to quell criticism, including hiring several Kaieteur News reporter.
Alistair Routledge, President of ExxonMobil Guyana
Meanwhile, Alistair Routledge, president of ExxonMobil Guyana Limited (EMGL), told the Financial Times that Lal’s activism was motivated by his political ambitions. According to the Financial Times, Routledge described Lal as a “self-interested” critic with political ambitions, adding that “this is a competitive contract that will bring investment to the country.”
The publisher, in response to Routledge’s comments, argued that as a citizen of Guyana he had the right not only to defend his country but also to pursue any profession he wanted.
“I find Routledge’s comments about me very rude and disrespectful. As a citizen of this country, I have the right to pursue any profession, say anything and do anything I want. Whether I want to enter politics or not, it is my prerogative,” Lal insisted.
He believes ExxonMobil is under threat, that unbalanced oil trading will be overhauled and that other mismanagement will not be tolerated under his leadership.
Lal added: “But let me say that if he and his company gave this country a fair shake, he would be happy to speak to the Financial Times about what Guyana got instead of meddling in the domestic affairs of who aspires to be a political leader. Mr Routledge and his company know that if anything changes in this country, this massive theft will stop completely the next day.”
Furthermore, Lal questioned whether any decent, patriotic leader would sit back and allow the industry to be mismanaged. “Any patriotic leader would allow Exxon to pump oil without its own meters? Any real leader would allow these projects to be approved without protection? Allow them to invest without restricting interest rates? Keep giving them projects without asking for taxes? Any government would allow a project to be approved without full protection against oil spills? No decent leader in any country in the world would sit back and allow people to be exploited in this way,” the newspaper publisher reasoned.
Notably, the Financial Times report also quoted President Irfaan Ali as admitting that the deal was “biased” in favor of ExxonMobil. Regardless, the president insisted that renegotiating the contract could have legal consequences that could be fatal to Guyana’s thriving oil industry.
Ali told the foreign news agency: “From an economic point of view, the size of ExxonMobil tells you that you simply cannot change the contract… There will be legal implications and the entire industry will be affected.”
In addition, Opposition Leader Aubrey Norton told the Financial Times: “We need to get more out of these oil resources… In the first 100 days, we will work with ExxonMobil to ensure that the people of Guyana benefit.”
ExxonMobil is the operator of Guyana’s oil-rich Stabroek Block, where more than 11 billion barrels of oil have been discovered since 2015. ExxonMobil and its partners Hess and CNOOC pay no taxes to Guyana and can recoup their investments early under the terms of the agreement. The contract provides for 75% of monthly revenues to be deducted from costs, with the remaining 25% shared with Guyana as profit. Guyana also receives an additional 2% royalty on all oil produced and sold.
Citizens have been protesting for a more favorable oil deal, especially in light of the huge developments in the Stabroek block. It is worth noting that when the deal was signed, ExxonMobil had discovered only 3 billion barrels of oil. However, the country’s oil reserves have grown to more than 11 billion barrels, which experts believe justifies a revision of the deal.
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