Dear Editor,
ExxonMobil and its partners have reportedly recovered approximately US$55 billion invested in the Stabroek Block—two years ahead of schedule—while Guyana’s share of production has risen from 12.5% to 39.8%. This strengthens Guyana’s negotiating position, and must stop being used as a basis for avoiding the discussion.
The Government’s reliance on “sanctity of contract” is legally flawed. Article 32.1 prevents Guyana from unilaterally altering or requiring renegotiation of the agreement without the contractor’s written consent. It does not prohibit Guyana from requesting that consent and negotiating mutually agreed changes. Sanctity protects contracts from unilateral repudiation-not conscionable, consensual amendment.
Contracts may be respected, but sovereignty, constitutional supremacy and the public interest must also be protected through lawful negotiation, regulation and enforcement. The Government can therefore request negotiations, offer reciprocal consideration and execute an enforceable amendment
A fortiori, in 2020, candidate Irfaan Ali promised to examine “renegotiating these contracts” to ensure Guyana did not receive “the wrong end of the stick.” President Ali should honour that commitment. With the consortium’s investment recovered and its commercial risk substantially reduced, Guyana now possesses its strongest economic and moral leverage. Refusing even to seek better terms would represent a serious failure of national stewardship, and governmental malpractice.
Moreover, the initial cost recovery does not guarantee permanently higher revenues. Without ring-fencing, expenses from Uaru, Whiptail, Hammerhead and future developments may enter the same Stabroek cost pool, potentially postponing Guyana’s full benefits.
The Government should formally seek:
- Ring-fencing of each development;
- Reduction of the 75% cost-recovery ceiling;
- A progressively higher royalty;
- Reasonable limits on extraordinary tax concessions;
- Timely audits, parent-company guarantees and a Guyana-based decommissioning fund.
These measures require neither confiscation nor repudiation-only lawful negotiation, mutual consent and fairness, in accordance with our independence, sovereignty and territorial integrity.
Guyana honoured the agreement while the consortium recovered its investment ahead of schedule and earned substantial returns. ExxonMobil should now demonstrate genuine partnership, bona fides and initiative by considering fairer terms for the country that owns the resource.
The Government must publish the verified cost bank, disclose unresolved audit findings and formally invite the contractors to negotiate. If ExxonMobil refuses, Guyanese deserve to know, but “sanctity of contract” cannot be invoked as a shield for inaction when the national interest demands leadership, initiative and the courage to negotiate. Stop using this term as an negative or impotent catchphrase. Stand up for your country!
Our petroleum belongs to present and future generations, including your own children. Respecting a contract does not require surrendering Guyana’s lawful right to demand a fairer share of its patrimony. Enough is enough.
Yours faithfully,
Albert Baldeo
Former Magistrate, Senior State Counsel and State Prosecutor
Community Leader and Judicial Delegate
New York, USA
