Dear Editor,
Prof. Dr. Stanley A. V. Paul’s well-crafted SN letter (Jan. 7th) highlights the challenges of renegotiating the oil deal while offering points to consider when negotiating such deals. While the letter raises essential points, it also contains notable omissions that merit closer examination while discussing the 2016 PSA Agreement.
In addressing “future negotiations,” Dr. Paul suggests that the original agreement lacked a foundation of “knowledge, preparation, and economic leverage.” However, he conspicuously neglects critical aspects of the deal’s creation, such as:
1. The secrecy surrounding the agreement, penned by Raphael Trotman, reportedly under pressure to accept its terms.
2. The $18 million USD signing bonus was quietly earmarked (supposedly to fund Guyana’s border defence against Venezuela).
3. There is a stark imbalance in the deal. Exxon appears to have had a heavy hand in influencing the agreement overwhelmingly in their favour.
Dr. Paul rightly stresses that “future negotiations must begin from a position of knowledge, preparation, and economic leverage” and underscores the importance of “Investor Confidence” through stable and predictable policies. He warns that abrupt or aggressive renegotiation could damage Guyana’s reputation as an investment destination. While these arguments holds merit, they overlook the questionable circumstances surrounding the 2016 agreement and the critical lessons it provides for future negotiations.
Equally troubling is Dr. Paul’s statement, “Half a loaf, as the adage goes, is better than none.” This assertion implies that Guyana should feel fortunate to receive a minuscule fraction of the benefits—just 2% of the profits! A more accurate and just framing would recognize the glaring inequity of the arrangement. A statement such as, “It is unjust and unfair for one party to receive nearly the whole loaf while the other is left with barely a crumb,” would more appropriately reflect the situation.
While Dr. Paul’s arguments are thoughtful, they would have been far more compelling with a candid acknowledgment of these critical issues.
Sincerely,
Dr. Devanand Bhagwan
