Citing the need to step up the fight against climate change, anti-corruption group Global Witness today withdrew an explosive report it had issued on Guyana last year which said that ExxonMobil’s exploitative deal had cost the country as much as US$55b.
In a statement, the London, UK-based Global Witness said that its February 3rd 2020 report on Guyana’s oil sector, `Signed Away’, is not consistent with its heightened focus on climate change and it had therefore decided to remove it from its website and stop using it in its campaigning work.
“The climate emergency is the greatest threat facing the world. If we are to prevent its worst impacts we all must act now. For Global Witness this has meant redirecting our efforts to fighting the main drivers of the climate crisis: deforestation, the extraction and burning of fossil fuels and the corporate capture and other abuses of power driving these destructive activities”, Global Witness said.
It said that its `Signed Away’ report focused on how much revenue Guyana could obtain from oil if the Guyana Government negotiated a fairer deal with oil major Exxon.
“Our revenue analysis assumed that Paris Agreement climate commitments would not be implemented – leading to an overestimation of the amount of oil Guyana would likely produce and the value of that oil. Under the new organisational strategy we have rolled out this year, this is not a scenario that we would accept because greenhouse gases have to fall by half over the next decade, for the sake of the planet and all of us living on it.
“Moreover, since publication, oil prices have dropped by more than a third. As COVID-19 continues to depress demand for fossil fuels and as countries implement policies to restrict the use of fossil fuels in order to tackle climate change, the prospects for sustainable income generation from new oil projects are increasingly questionable.
“These factors led us to overestimate the potential economic benefit of oil extraction. Based on feedback from civil society representatives in Guyana, we recognise that our report has made it harder for them to argue the case for cessation of oil production in their country”, Global Witness said.
It added that since its founding in 1993 it has sought to end the environmental destruction that harms so many people around the world – holding the powerful to account while advocating for people who have lost their livelihoods or lives.
“However, as the destructive impacts of the climate crisis – flooding, desertification, famine – have become more acute, it has become clear that our work needs to change. It is no longer enough for Global Witness to demand that oil and gas businesses operate in a more transparent and accountable manner. We firmly believe that to save the climate, we need to work with others to achieve a just and equitable phase out of fossil fuel extraction. To do this, we need to elevate the voices of activists fighting the forces driving the climate breakdown around the world”, Global Witness said.
Global Witness said that its decision to withdraw `Signed Away’ is not an endorsement of the way Exxon or Guyanese officials negotiated the oil licences awarded to the company.
“We stand by the integrity of the evidence we have presented. We also stand by the fiscal model produced by OpenOil that was commissioned by Global Witness. Expert, transparent, and instructive, OpenOil’s work and its fiscal model are standard-setting”, the statement said.
“Most importantly, we strongly support the inspiring investigations and campaigning that so many Guyanese reporters, campaigners, and experts have undertaken in recent years to increase accountability around the deals between Guyana’s government and Exxon and other oil companies. It is this work that will hold the powerful to account and Guyanese people should be proud to have such relentless advocates working for them”, Global Witness said.
It said that it regretted any unintended negative consequences arising from the report, including its “stifling of debate within Guyana around actions to address climate change”.
Following the publication of its report, Global Witness had been strongly criticised by local activists.
On 25th August, 2020 Anand Goolsarran, the former Auditor-General of Guyana, Ramon Gaskin, Melinda Janki, Leland de Cambra, Fred Collins, Transparency Institute Guyana Inc., A Fair Deal for Guyana – A Fair Deal for the Planet, Justice Institute Guyana, members of the religious community, and other concerned Guyanese wrote to the Chair and board of Global Witness requesting the calculations that Global Witness used to get its revenue figures of US$168bn and US$55bn. Global Witness responded that the calculations were ‘readily available’ but failed to provide them. Global Witness subsequently told the group that they could get the figures from the OpenOil model but failed to explain what assumptions Global Witness used to get to their estimates.
These activists had called for the withdrawal of the Global Witness report.
The Global Witness report of February 3rd last year had called for the Guyana Government to renegotiate the controversial 2016 Production Sharing Agreement (PSA) with ExxonMobil.
It said that ExxonMobil’s aggressive tactics with inexperienced Guyanese officials would cause Guyana to lose up to US$55 billion in an exploitative oil contract, citing the analysis it commissioned.
It made the following recommendations:
1. The Guyanese government should renegotiate Exxon’s Stabroek oil license. The government should seek a share of revenue that equates with international standards, increasing Exxon’s financial obligations such as royalty and income tax payments. Prior to negotiations, the government should commission an independent evaluation to determine what the country deserves from the license, although Global Witness believes a minimum equitable share of oil revenue for Guyana would be 69 percent. Negotiations should be undertaken by impartial government officials, drawing upon expert advice. Additional revenue received as a result of renegotiation can be invested in development priorities and managed within a Natural Resources Fund that incorporates meaningful and transparent engagement with civil society. It can also be used to fund ambitions contained in the Green State Development Strategy – ensuring that the country’s economy is stronger and ultimately not dependent upon the oil sector.
2. In the context of the climate emergency, and given the revenues that Guyana could receive from the existing Stabroek oil finds, the Guyanese government should place a moratorium on any new drilling. Guyana could allow Exxon to extract oil from the 16 wells it has already drilled, but allow no additional drilling in the Stabroek license. Guyana should also cancel its nine other allocated licenses and not award any new licenses.
3. The Guyanese government should investigate the process by which the Stabroek license was negotiated. This should include a review of whether an apparent conflict of interest prevented Raphael Trotman from fully negotiating in the best interests of the country.
4. The Guyanese government should adequately resource and ensure the independence of its anti-corruption agencies.