November 24, 2020 Read More →

Guyana caught in debt trap by ExxonMobil deal

Kaieteur News:

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.

As a result of these and many other similar provisions, Tom Sanzillo, Director of Finance at the Institute for Energy, Economics and Financial Analysis (IEEFA), told Kaieteur News, Guyana will not have enough money from the oil projects to save significantly as well as to cover budget deficits. In fact, the Director said that Guyana will find itself owing ExxonMobil US$20B at the end of 2025. It is a cycle of debt that is expected to continue for not only the Liza Phase One project, but all others to follow. 

[Staff Report]

More: ExxonMobil deal leaves Guyana in debt trap for decades

Posted in: IEEFA In the News

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