COLUMN | Guyana update August 3 [Offshore Accounts]

Dr Mohammed Irfaan Ali (right) being sworn in as Guyana's President on August 2, 2020 (Photo: Department of Public Information, Government of Guyana)

President David Granger has finally stepped aside as head of state of Guyana and PPP candidate Irfaan Ali has been sworn in as president, after election officials finally released the results of the recount of the votes from the disputed election held on March 2 on August 2. Now, five months later, Granger has left office at last and his successor President Ali of the PPP has pledged to work on reuniting the fractured nation.

“I would work every day, in the best interest of the people of Guyana. There is only one future, and that future requires a united Guyana,” Ali said after his inauguration. “That future requires a strong Guyana. That future requires every Guyanese to play a part in building our country and ensuring we leave a better Guyana for the next generation. We are in this together. We are not separated by class, ethnicity, religion or political persuasion. We are united in the true Guyanese spirit.”

You can read more about the quickly moving events in Georgetown from the Stabroek News here.

Now that there has been a peaceful transition of power, questions remain about whether the new PPP government will attempt to renegotiate the production sharing contract with ExxonMobil and its partners for production from the prolific Stabroek Block. The PPP has previously criticised the agreement, which was negotiated and signed by Granger’s government.

The terms of the contract include a two per cent royalty paid by ExxonMobil to the Guyanese government, which has been criticised as too low, and a 50 per cent profit share after cost recovery by ExxonMobil, which is seen as too generous to the supermajor. However, Ali has been vague on whether he will attempt to renegotiate the terms, and ExxonMobil has maintained that the terms are fair in light of the risks the company and its partners took to explore in a deepwater frontier basin with no prior discoveries.

Hieronymus Bosch

This anonymous commentator is our insider in the world of offshore oil and gas operations. With decades in the business and a raft of contacts, this is the go-to column for the behind-the-scenes wheelings and dealings of the volatile offshore market.