(Bloomberg) — Guyana vigorously defended its oil contract with Exxon Mobil Corp. after the deal was criticized by human-rights group Global Witness just a month before the country holds a general election.
The report faulted “inexperienced” government officials for failing to press for better terms when the contract came up for renegotiation in 2016, the year after Exxon made a giant oil discovery. The deal was signed with little transparency, is heavily weighted in Exxon’s favor and will deprive the tiny South American country of some $55 billion over the life of the agreement, it said.
Guyana’s government “views the report as a cunning and calculated attack on a sovereign state with a duly elected government mere weeks before an election,” the ministry of the presidency said in a statement.
The government’s share of oil from the Exxon contract after costs are deducted is 60%, in line with both emerging oil and gas producers such as Mozambique and more established countries, it said, citing a study from Oslo-based Rystad Energy.
The debate over oil revenues and how they are spent is becoming a key battleground in the election, the winner of which will lead a country that by the mid-2020s will probably produce more crude per citizen than any other nation in the world. Such is the sheer scale of production, Rystad estimates the government’s income will jump from $270 million to $10 billion in the next decade.
The government backed Natural Resources Minister Raphael Trotman, who signed the 2016 deal, saying that signing the contract with Exxon was not just about fiscal terms. Guyana has been in a long-running border dispute with neighbor Venezuela, which has a much larger military.
“There were geo-political and national security imperatives which could not be ignored,” according to the statement….
Source: FuelFix
