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Home Op-ed

A look at PPP Govt’s shift on oil contract

Staff Writer by Staff Writer
August 8, 2022
in Op-ed
GHK Lall

GHK Lall

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By GHK Lall

The PPP Government has now shifted its position on Guyana’s burdensome oil contract with Exxon.  It is speaking a different language in carefully constructed wording.  It seems that the leaders in the PPP Government are readying to move slowly and cautiously to bring about changes in the contract that they had cursed so vehemently.  I warn all citizens from today: be careful! Much more is afoot than meets eye and ear.  What should register is a combination of slick politics from the PPP side, and smart business sense on the part of Exxon.

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The record is an open book.  Numerous PPP spokespeople, when the party was in the Opposition, had raged against the contract signed by the then APNU+AFC Coalition Government.  The party’s spokespeople went to town with one scornful putdown after another on how terrible, how vile, the contract with Exxon was.  The attacks against the Coalition continued when the PPP returned to power in 2020, and has never really let up in intensity, with every opportunity seized to remind all Guyanese how criminal the contract was.  In parliament, in the media, and in the outreaches before captive audiences loaded with docile supporters, PPP leaders or ministers lashed and bashed the contract.  It was another way of burning the Coalition in effigy before frenzied and delirious believers.

Now the Vice President, the man who calls all the shots on oil (and everything else, I remind everyone), has publicly announced the first movement in a different direction.  The new position is that the oil contract with Exxon is not the worst one ever (walking back previous strenuous contentions), and it is not the best one that could be had.  It is not that bad, and it is not so good.  Therefore, the admission that some work is required to bring about much needed changes in this contract that enslaves country and citizens.  In essence, this is the new position taken, the new direction to be pursued by the PPP Government, with the Vice President leading the charge.

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This is not an overnight development.  Rather, it is a place arrived at after a wise weighing of the environment, the pressures that are coming from small pockets of the protesting, and always in lockstep with what the territory could absorb.  To say this differently regarding the latter, it is where Government leaders could keep up the charade of not being in bed with Exxon, while working towards what would be acceptable to Exxon’s leaders and interests.  I think that such an approach has many benefits for the Government.

First, it weakens the steam issuing from those coming out in the streets and calling for renegotiation; after all this is what is being pursued, except that it is on a different timetable, that of the government and its visions.  Second, putting change on the table helps to buy time, even serves as a good distraction to keep the people occupied.  Third, this development involving a leadership outlook where the middle ground is taken, paves the way for the change talked about to come into full flower.  This is what I discern is going to be this new mantra of change in very nuanced language in the days ahead.  For certain, it is neither going to be radical (hostile) or aggressive (in-the-face), but a deliberate, and step-by-step method to use up as much of the clock as possible, while always keeping the candle of change to this terrible stepmother of a contract.  And should anybody need any reminder, a contract by the enemy PNC hands; there is the added benefits of a possible major issue under review by the Coalition being yanked from its hands.

In sum, the word making the rounds going forward is this: work is going on to bring about changes for better for Guyanese with the contract.  Change will come, and though it is not a walk in the park, there is no shortage of energy, and with every confidence of delivering for all Guyanese.  Nothing can beat that, and few can argue otherwise.  For its part, I strongly believe that Exxon will play along, since it is part of the game being played upon lost and easily fooled Guyanese.  Don’t expect anything other than the usual polite noises from the likes of Alistair Routledge and Darren Woods, who are very good at these tricks.

I would layout from now a timeline that should take shape like this.  The PPP Government, with the Vice President arranging and conducting the orchestra for oil contract change, would lead Guyanese along for a while longer, and always with the promise that change is on the way, and change is going to come where the contract is concerned.  One year is a good middle ground regarding timeframe, for building up the narrative, and guiding when and how it peaks.  The closer this country draws to the next elections, the more prominent talk about change, and move towards change in the contract, will be in the air.  As said earlier, Exxon can be trusted to go along to maintain the appearances of real approaches and real discussions going on.  To stake out another position from now, it is my belief that Exxon has already finalized what it is prepared to yield, and knows what different concessions (changes or renegotiations) will cost.  I think it is somewhere within the range of a 1-2% increase in royalty, and about a year prior to elections.  The victory for the PPP would be that it is 100% better than the PNC managed.  As an elections ace, it can be bettered.

The PPP gets to crow about how hard it fought for Guyanese, and how well it did for them.  Exxon is able to speak brightly about partnering and collaborating (if Guyanese only know how) with this country.  Americans get to join in the feel-good moment.  And all Guyanese live happily ever after.  What is there not to love about change to the oil contract, PPP Government and Exxon style?



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