The current Production Sharing Agreement (PSA) this country has with an ExxonMobil subsidiary will not be renegotiated under a Robert Badal-led government as the Change Guyana Party (CGP) presidential candidate believes that the point at which it was struck was a key factor.
However, he said that should he get into office, he would enlist a group of expert advisors to analyse all contracts and make recommendations on the way forward. Those recommendations, Badal said, would form the basis for whether his government would ask companies to return to the renegotiating table.
“A country that had no petroleum history, we only detected the reserve in 2015 and it was difficult to get the best deal at that time [and could not ask for much].
“If you insisted on too many hard policies, then you might not get investors because it was a massive unknown there, but as things progress, I am inclined to believe that we will get better contracts, “ Badal told Stabroek News in an interview last week.
Critics have said it is not the 1998 agreement with ExxonMobil subsidiary EEPGL which was unacceptable but the post-oil PSA of 2016 which enlarged the exploration period for the company and contained the much criticized signing bonus.
“It is important that people understand the plans of each party, even though we must understand that plans change over time as events unfold. We would engage the best industry experts. The way I do things is that I engage the best in a particular field until I build my knowledge. I did the same for the hotel, I did the same for feed (selling). We will mandate that the group that will advise us will have to look at these contracts and find out if we could have gotten a better deal. Whatever recommendations is made then, will form the basis of the actions that we will take”, he added.
He said that the issue of the contract with ExxonMobil and partners is a genuine concern for the people of this country as oil will make a significant impact on development, while it lasts.
He said that a Badal-led CGP will first implement measures so that this country’s citizenry “better understand the dynamics of the industry”, even as it gives it support to investors coming here.
“We will be fully supportive of the investors and their plans to develop the petroleum reserve that we have here. We will ensure that the people of Guyana get their fair share and seek the best advice … We will work with investors to ensure that Guyanese have the best deals and benefit in a fair way,” he said.
“We will ensure that there are downstream industries based on the petroleum products and those downstream industries will spark big industrial development of our country. This party will insist that Guyanese must have ample equity in this,” he said.
“In relation to negotiating with the investors … we know that these investors are massive companies and have built them on basis of honesty and integrity and hard work, so we foresee that they will make a significant contribution to the development of this country. We think they are reasonable and I believe that we could work well with them to improve the returns we get from the industry. Rest assured that at no point will we allow the benefits from oil to not reach every one”, he added.
The hotelier said that low-cost power has been one of the major factors hindering the manufacturing and business sectors. It is to this end that he will have a policy in place to ensure that natural gas from oil production operations be brought onshore for domestic use.
“We will also ensure that whatever gas is available, it is available to GPL (Guyana Power and Light) or whatever entity, in a private public partnership, so that we can generate low cost electricity for industrialisation”, he posited.
The hotly debated issue of cash transfers has also gotten the attention of Badal and party members as he said that it will be one area that the oil and gas team of experts will have to produce a report on.
And while he believes that the lobby for cash transfers is a rational one given the level of poverty in this country, he said that he could not make a unilateral decision and will have to wait on the outcome of analysis to determine the possibility.
But he also feels that there are many other issues that need addressing before cash transfers.
He added, “We have to spend on education because education, from nursery to university, has to be free. If the current non-oil economy can’t afford that then we have to chip in with our returns from oil. Our medical care is woefully bad. People who can afford, don’t seek medical attention in Guyana, so we need to focus on health in general; that needs to be addressed and we will ensure that is free”.
There is also an infrastructural deficit in Guyana, he pointed out.
“Coming from the airport is the worst road I have ever driven on in any country and these roads have been recapped many times. Bridges need to be built… we need better irrigation also and sea defences. So there are a lot of urgencies that has to be taken care of. After we look at all that, if there is justification [for cash transfers] we will undertake that although I believe there is justification now given the poverty level in Guyana, But we also have to look at other urgencies as well,” he added.
And to persons who say that the businessman has entered into political life because of the large amount of revenues to be derived from the oil and gas sector, Badal dismissed those claims saying that he is living a comfortable life right now and does not need the money or power that comes with a presidency.
For the record, he declared that “I would not be taking a salary”.
