The Pres­i­dent of Exxon­Mo­bil Guyana, Al­is­tair Rout­ledge, has all but ruled out a rene­go­ti­a­tion of the Pro­duc­tion Shar­ing Agree­ment (PSA) be­cause it would ad­verse­ly im­pact the com­pa­ny’s planned US$55 bil­lion in­vest­ment in Guyana.

“We have no in­ter­est in in­vok­ing that Ar­ti­cle. As I say, we’ve made US$55 bil­lion worth of com­mit­ment to the coun­try. To go back and to un­der­mine the ba­sis of that in­vest­ment would se­ri­ous­ly chal­lenge any fu­ture in­vest­ments,” he told a news con­fer­ence.

But he told re­porters that if the ba­sis for the in­vest­ment changes, in­clud­ing at least an in­crease in the roy­al­ty from two to five per cent, it would un­der­mine its ba­sis if the orig­i­nal num­bers change.

“If we start to have un­cer­tain­ty around the ba­sis for the in­vest­ment, not just the ge­o­log­ic risk, the ex­e­cu­tion risk, then it se­ri­ous­ly starts to un­der­mine that in­vest­ment the­sis,” he said.

Rout­ledge spoke about the is­sue af­ter the Op­po­si­tion Leader,  Aubrey Nor­ton, out­lined his  20-point plan for the hy­dro­car­bon sec­tor should the main op­po­si­tion Peo­ple’s Na­tion­al Con­gress Re­forms (PN­CR) win the 2025 gen­er­al elec­tions.

Nor­ton said that the plan in­cludes in­vok­ing Ar­ti­cle 32.1 of the PSA that states the com­pa­ny must give per­mis­sion for any of sev­er­al things, in­clud­ing rene­go­ti­a­tion, to be done with the PSA.

“Ex­cept as may be ex­press­ly pro­vid­ed here­in, the Gov­ern­ment shall not amend, mod­i­fy, re­scind, ter­mi­nate, de­clare in­valid or un­en­force­able, re­quire rene­go­ti­a­tion of, com­pel re­place­ment or sub­sti­tu­tion, or oth­er­wise seek to avoid, al­ter, or lim­it this Agree­ment with­out the pri­or writ­ten con­sent of Con­trac­tor.”

Asked whether he be­lieved that Guyana was en­ti­tled to more of the rev­enues now that Guyana-Suri­name Basin has been de-risked, Rout­ledge said in­vest­ments and rev­enues were hinged on the ex­ist­ing agree­ment cov­er­ing 30 years.

Rout­ledge told re­porters it is bet­ter to have a “fair share of a much larg­er num­ber and ul­ti­mate­ly that’s more mean­ing­ful for the coun­try” in­stead of a large share of a small­er num­ber.

Rout­ledge was al­so of the opin­ion that the coun­try’s Lo­cal Con­tent Act pro­vides a guide­line for oil and gas com­pa­nies and open the doors to nu­mer­ous op­por­tu­ni­ties for lo­cal busi­ness­es and cit­i­zens.

Passed in 2021, the leg­is­la­tion al­lows Guyanese busi­ness­es to ben­e­fit from em­ploy­ment and con­trac­tu­al op­por­tu­ni­ties that sup­ply a va­ri­ety of goods and ser­vices to the oil and gas sec­tor.

The Act de­fines 40 sub-sec­tors that in­clude trans­porta­tion, ac­com­mo­da­tion, le­gal ser­vices, mar­ket­ing, and pub­lic re­la­tions. The Act makes it manda­to­ry that a per­cent­age of these goods and ser­vices must be pro­vid­ed by Guyanese.

Rout­ledge said the leg­is­la­tion pro­vides an­oth­er av­enue for Guyanese to ben­e­fit from de­vel­op­ments in the oil and gas sec­tor.

“We recog­nise that this is Guyana’s re­source, [and] we want the peo­ple not on­ly to ben­e­fit from what we pay in roy­al­ties and prof­it share or tax­es but al­so in the de­vel­op­ment phase; we are mak­ing op­por­tu­ni­ties avail­able as quick­ly as we can for peo­ple to be em­ployed and for busi­ness­es to ben­e­fit and grow,” he said.

Rout­ledge point­ed out the Act’s use­ful­ness is en­sur­ing for­eign com­pa­nies have the op­por­tu­ni­ty through a clear frame­work to part­ner with lo­cal busi­ness­es to pro­vide a high­er lev­el of ser­vice to com­pa­nies op­er­at­ing in the oil sec­tor.

“I think where the Act has been help­ful…is for new en­trants to the coun­try be­ing clear on the ba­sis of which they are ex­pect­ed to come in and en­cour­ag­ing them to part­ner with lo­cal in­vestors and com­pa­nies. I think that has been help­ful, [giv­ing] clar­i­ty for new in­vestors in the coun­try,” Rout­ledge said.

The Lo­cal Con­tent Sec­re­tari­at man­ages the Lo­cal Con­tent Reg­is­ter, a data­base con­tain­ing the names of over 900 lo­cal com­pa­nies qual­i­fied to ben­e­fit from op­por­tu­ni­ties pro­vid­ed un­der the Act.

Rout­ledge said the agency has played a crit­i­cal role in stream­lin­ing com­mu­ni­ca­tion be­tween the Guyana gov­ern­ment and Exxon­Mo­bil.

As a re­sult of the Lo­cal Con­tent Act, lo­cal com­pa­nies have earned near­ly one bil­lion US dol­lars, with a gov­ern­ment state­ment in­di­cat­ing that by the end of the year, sev­er­al oth­er op­por­tu­ni­ties will open up in ar­eas such as trans­porta­tion, elec­tri­cal, plumb­ing and ad­min­is­tra­tive sup­port.

GEORGE­TOWN, Guyana, Oct 10, CMC

CMC/gt/or/2024