Much discussion has revolved around Stephen Sackur’s Hardtalk recent interview with Mohammed Irfaan Ali, the President of Guyana. Except for firmly correcting Sackur on Guyana’s commendable history of climate change, Ali allowed himself to be cross-examined and chastised by a journalist about the correctness of government policy.
That said, there was also Hardtalk’s “On the Road Guyana,” in which Sackur travelled across Guyana visiting the remote parts that would be impacted by the oil boom and the environmental impact if there was an oil spill.
When Sackur interviewed Exxon Mobil’s president, Alistair Routledge, they discussed the product sharing agreement of 2016 between the previous Guyanese government and Exxon Mobil, the significant cost offsets and the revenue share agreement, the government would receive.
Exxon pays Guyana 2% in royalties, which is significantly lower than the standard 10% observed in many other countries where they conduct fossil fuel exploration.
Their cost-sharing agreement enables Exxon to deduct billions of dollars in costs before profit-sharing, a practice deemed exploitative. Consequently, Guyana stands to lose billions of dollars in potential income. Exxon defends its position by citing the numerous risks associated with exploration, not limited to geological hazards alone.
I had to ask myself, why would the Guyanese government consent to such terms given they have the oil? Why did they undervalue their position? Were the negotiators inadequately equipped to handle discussions at such a high level?
The terms of the agreement are widely considered unfair despite Routledge’s assertion that they are fair to both parties. Even the (IMF) has deemed the terms overly generous and recommended that the current Guyanese government rewrite its tax laws to ensure the state receives more crude proceeds in future contracts.
In October 2023, Guyana conducted a competitive auction featuring new production-sharing terms to 10 % profit share. A significant increase from the previous 2% and terms that Exxon appears reluctant to accept.
I’m not privy to the finer points of these agreements, but I am reminded of Thomas Pakenham’s Scramble for Africa, in the 1800s when the Europeans carved up Africa and now the Caribbean regions. Has much changed?
In my view, there is something about the nature and terms of these deals. My perspective is not new. Forests in Africa are being sold off, which can generate billions in carbon offsetting revenue in the future. The North-South Highway (toll road), which directly connects the Jamaican capital, Kingston, to Ocho Rios, has left them with a 50-year lease and $ 730 million debt to China.
My work centres around knowing your value and understanding how our beliefs can influence every facet of our lives, and I’m prompted to question whether the Caribbean and developing countries often agree to terms that would not be accepted elsewhere. Are we still bound by some unconscious inferiority linked to our colonial past? I’m curious to know.
Are we still living in a bind that despite the valiant attempts by leaders across the African continent (i.e. Patrice Lumumba, Kwame Nkrumah) and the Caribbean over the past 60 years that we are still held by some form of the colonial stronghold, which ultimately cripples our minds, beliefs and ultimately progress?
I am encouraged, however, by Mia Motley, Barbados PM, and Guyana’s President Irfaan Ali and their unwavering confidence and desire to wrestle the colonial chains of the past and build something new.
They are unafraid to challenge, re-negotiate unfair terms, and confront any interviewer who sits opposite, points a finger, and dictate what they should or shouldn’t do. Their determination to reshape the narrative is admirable.
