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November 30,2017

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The contract between the Guyana Government and ExxonMobil subsidiary EEGPL will be made public in December, according to Minister of State Joseph Harmon.

He made the disclosure at a post-Cabinet press conference today in response to a question from Stabroek News.

He said that Cabinet has had a full discussion on the matter.

The government has been harried and criticised over its non-release of the contract. Questions have been raised about why a new agreement was signed between the APNU+AFC government and ExxonMobil and whether it entailed payment of a signing bonus.

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Django posted:

November 30,2017

Source

The contract between the Guyana Government and ExxonMobil subsidiary EEGPL will be made public in December, according to Minister of State Joseph Harmon.

He made the disclosure at a post-Cabinet press conference today in response to a question from Stabroek News.

He said that Cabinet has had a full discussion on the matter.

The government has been harried and criticised over its non-release of the contract. Questions have been raised about why a new agreement was signed between the APNU+AFC government and ExxonMobil and whether it entailed payment of a signing bonus.

Will the entire contract be published or the government will claim national security concerns and redact the $20 mil bonus?

FM

They will not let you see the fine prints.

‘Exxon contract not cast in stone’


– Int’l lawyers says ‘sanctity of contract’ doctrine does not mean an agreement cannot be changed

Kaieteur News – “There is a willingness not to treat contracts as cast in stone (so) that while contracts bind us to terms and conditions, if the conditions have changed so dramatically and so detrimentally, then the reopening and renegotiation of contracts is a reasonable demand of the people of Trinidad and Tobago and we anticipate that our partners in this business will see our claim as a fair and just one and we anticipate that there will be some reopening of contracts so that at the end of the day, we can all sustainably benefit from the God-given riches of Trinidad and Tobago.”

International Lawyer, Melinda Janki

This is the position of the T&T Prime Minister, Dr. Keith Rowley on the issue of renegotiation, and getting more value from the natural resources his country is blessed with, for its citizens. Rowley made these statements during an Energy Conference held in the twin island, putting oil companies on guard that he will be “reopening” the oil contracts as “dramatic changes” trigger this reasonable demand.

Here in Guyana, the leaders have taken the position that the 2016 Production Sharing Agreement (PSA) the country has with oil giant ExxonMobil and its partners will not be changed to maintain “sanctity of contract”. But various experts have clarified that the lopsided contract can be changed.

More recently, International Lawyer, Melinda Janki weighed in on government’s position on the deal, explaining that this ‘sanctity of contract’ term does not mean that a renegotiation is impossible. Janki was a presenter on a Globespan 24×7 discussion where she pointed out “when we hear people yapping about sanctity of contracts and that is the reason for not changing the contract that is of course complete nonsense. Sanctity of contract does not mean that the contract cannot be changed by the parties to the contract. Sanctity of contract means that one party cannot unilaterally suddenly decide that he or she, or it doesn’t like these terms so they are not gonna do it. It’s two different thingsâ€Ķ”

The lawyer was keen to note that the 2016 PSA, specifically at Article 31.2 states, “This agreement shall not be amended or modified in any respect except by written agreement entered into by all the parties which shall state the date upon which the amendment or modification shall become effective.” As such, Janki told viewers of the online programme that the deal most definitely can be changed. However, she did point out, “The government, Esso, Hess and CNOOC can sit down and change that agreement. They can amend it. The difficulty is why would they. Exxon is here to make money; so is Hess, so is CNOOC and the worst that the deal is for Guyana the more money they will make.”

Only yesterday Kaieteur News reported that both the former and present governments have been misusing the sanctity of contract doctrine to avoid renegotiating the lopsided deal. This is according to a New York-based Guyanese, lawyer, Dr. Vivian Williams who explained in an invited comment that, “What is playing out is the misapplication of a legal doctrine to avoid acting in the nation’s best interest. Because the sanctity of contract doctrine does not apply to the consensual process of contract renegotiation, common sense should have shut down that argument before it was even made.”

The lawyer added, “Simply put, sanctity of contract means, an agreement made freely, knowingly, and fairly by competent parties, must be kept. It operates as a fundamental principle of contract law, reflected in principles such as pacta sunt servanda, well unknown to state actors. Therefore, despite sovereignty, a state is liable if it unilaterally breaches an agreement.”

However, Dr. Williams contended that the renegotiation of a contract is a common practice that does not collide with the sanctity of contract doctrine. He said it involves the revisiting of problematic terms of an agreement by parties who may or may not reach agreement on a revision. Therefore, Dr. Williams argued that sanctity of contract and renegotiation of contract are parallel processes that compliment rather than offend each other.

Last week, it was reported too that former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams said the major changes in the Stabroek Block validate the calls for a renegotiation of the deal. He was keen to note that when the deal was inked in 2016, Guyana had merely discovered approximately 1.1 billion barrels of oil, but fast forward to six years later, the country has found more than 10 billion more barrels of oil with exploration activities still ongoing.  He said that it is customary for changes in an environment to inform modifications to contracts in countries around the world. In addition to this, the former EPA boss highlighted the fact that modifications have already been made to the 2016 contract, which further shows the invalidity of government’s “sanctity of contracts” argument.

Source:

Mitwah

Both Governments misused ‘sanctity of contract’ doctrine to avoid acting in nation’s best interest – NY Lawyer

Oct 02, 2022 News --- Source -- https://www.kaieteurnewsonline...-interest-ny-lawyer/

“Simply put, sanctity of contract means, an agreement made freely, knowingly, put fairly by competent parties, must be kept”

By Kiana Wilburg

Kaieteur News – Though the 2016 Stabroek Block Production Sharing Agreement (PSA) has been heavily criticized for having a gross number of fiscal weaknesses, the PPP/C administration has maintained that no renegotiation will take place.

The party’s top officials such as Vice President, Dr. Bharrat Jagdeo have categorically stated that they abide by the sanctity of contract doctrine. This principle states that the companies involved as well as the State will uphold their obligations under the deal.

A New York based lawyer, Dr. Vivian Williams has since challenged this standing by the Government, as he believes there are clear grounds for which that principle can be set aside or overruled.

In an invited comment, Dr. Williams said successive administrations have, for too long, invoked the common law doctrine of sanctity of contract to evade calls for renegotiation of the Stabroek Block PSA.

New York based Lawyer, Dr. Vivian Williams

He said, “What is playing out is the misapplication of a legal doctrine to avoid acting in the nation’s best interest. Because the sanctity of contract doctrine does not apply to the consensual process of contract renegotiation, common sense should have shut down that argument before it was even made.”

The lawyer added, “Simply put, sanctity of contract means, an agreement made freely, knowingly, and fairly by competent parties, must be kept. It operates as a fundamental principle of contract law, reflected in principles such as pacta sunt servanda, well unknown to state actors. Therefore, despite sovereignty, a state is liable if it unilaterally breaches an agreement.”

However, Dr. Williams contended that the renegotiation of a contract is a common practice that does not collide with the sanctity of contract doctrine. He said it involves the revisiting of problematic terms of an agreement by parties who may or may not reach agreement on a revision. Therefore, Dr. Williams argued that sanctity of contract and renegotiation of contract are parallel processes that compliment rather than offend each other.

Furthermore, the lawyer stated that there has been an escalation of grave errors by the current and previous governments when it comes to the 2016 deal. Dr. Williams said this takes the form of escalating a commitment to bad decisions because one is already vested. “â€ĶIn this case, Guyana’s escalation of error involves vesting itself in the defense of what it acknowledges is a bad deal,” the lawyer stated.

Expounding further, the lawyer outlined how key errors have escalated over the years. The first he said occurred in June 1999 when the government signed a clumsy exploration agreement. That agreement granted a petroleum exploration licence to Esso Exploration and Production Guyana Limited (EEPGL) that violated the country’s Natural Resources Law on the number of blocks that can be awarded to a company. The company was given 600 blocks when only 60 are allowed by law.

When that error came to light after oil was discovered in commercial quantities in 2015, Dr. Williams said the political actors now in power, used justification to defend the error. “The justification offered is that oil was not yet discovered. Of course, if you are engaging in exploration, you have no assurance that the exploration would lead to any discovery. However, predictive analytics and other factors should lead to better bargaining.”

After the 2015 discovery of oil, he noted that the APNU+AFC Government at the time signed a PSA which did not correct the award of the blocks. He recalled that the amended contract was later condemned as lopsided and unfair to the country by the political party now in government and global experts.

The next error he said was that the PPP Government inappropriately invoked the sanctity of contract doctrine in defense of what it has accepted as a lopsided contract. He said it then kicks the can down the road, promising to do better in future contracts.

Taking the foregoing into account, Dr. Williams said a troubling trend has therefore emerged. At each stage of the country’s journey into petroleum production, he said an oil giant upon whom it relies, dupes it into a lopsided agreement. This he said is followed by the aggrieved country defending what it accepts as a bad deal and marches forward.

Dr. Williams said this cycle of error has repeated itself for almost a quarter of a century, spanning several administrations. He said it is a cycle that mirrors the exploitation the country experienced in other natural resource sectors, for all its life.

The Lawyer is of the view that the history of successive failures in negotiations with multinational companies is not a confidence booster to the people the Government is asking to have faith in the future. To the contrary, he said it undermines confidence and creates disquiet.

He has since said it is an economic mistake if the country continues along this line; adding that it tells investors the authorities are willing to roll over and accept unscrupulous conduct.

FM

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