From beginning to end, the Production Sharing Agreement (PSA) governing the oil rich Stabroek Block, has some of the world’s most oppressive provisions, which ensure the lion’s share of the nation’s wealth is tumbling by the billions into the pockets of ExxonMobil and its shareholders.
Also cunningly interwoven into the Stabroek Block deal that was signed by former Natural Resources Minister, Raphael Trotman, are traps that will leave Guyana shackled by debt for decades to come. One such trap involves a provision that allows ExxonMobil to recover any and all interests it racks up on loans borrowed to fund the development of oil projects in the offshore concession.
The interests accumulated can be recovered even if they are gold plated. Several globally respected organisations such as the International Monetary Fund (IMF) have said there is no economic logic for allowing this and had advised the Government to prohibit oil companies from recovering the interests and other financing costs. Former University of Houston Instructor, Tom Mitro, had agreed with such a recommendation as he contended that this arrangement leaves Guyana open to the abusive use of debt by the operators, since Guyana is essentially standing all the costs.
The new oil producing state is also shackled to other exploitive provisions which state that the country will essentially foot the bill for any legal fees that Exxon incurs for action brought against it by the state.