Sarah-Ann Lynch
October 1,2020
-US envoy says Guyana should do its homework on investors
Talking up the benefits of the United States’ corporate investment portfolio, United States Ambassador Sarah-Ann Lynch has said that oil major ExxonMobil operates in line with its international standards, which Guyana should prioritise in all investments after doing its due diligence.
“I think what US companies bring to Guyana and across the globe is quality of work and excellence. We have a lot of rules and regulations in the US, which means that sometimes these commitments, or contracts or deals take a while or a little bit longer to happen but it is worth it in the end. Because you know what you are getting. You are getting a commitment to that quality, to that excellence, to international standards and we also commit to hiring local staff and building local expertise,” Lynch told Stabroek News in an interview on Tuesday.
“ExxonMobil has a great reputation across the board,” she further contended after being asked if she believed that ExxonMobil brought all of the qualities she had mentioned. “I know we are pleased to see in the press they are reporting that there is tremendous progress on the third project, the Payara project. As I understand it, Cabinet still needs to review it and it needs to be signed but it looks [like] quite a bit of progress there. Joining Liza 1, Liza 2. This is good for Guyana,” she added.
Following months of concerns raised over ExxonMobil’s flaring and dumping of reservoir water into the ocean, an agreement has been reached on the project in the Stabroek Block and is awaiting signatures, according to Minister of Natural Resources Vickram Bharrat.
Some analysts had suggested that government should use the Payara project as leverage to push for a better production sharing agreement with Exxon as when Guyana renegotiated in 2016 it did so with a weak and inexperienced legal and technical team. In that renegotiation, this country was left with only a 2% royalty and other impositions which are seen as oppressive.
The Ambassador said that she has not seen the agreement but added that she can vouch that businesses from the US must operate according to set standards.
‘Unlock opportunities’
As she discussed the Growth of the Americas Framework agreement that was signed when Secretary of State Mike Pompeo visited Guyana earlier this month, the Ambassador was asked how precisely the local private sector and Guyanese would be able to benefit.
She echoed most of what was shared by Pompeo and the President at the signing of the agreement, which is aimed to strengthen energy and infrastructure finance and market building cooperation between Georgetown and Washington. “It will unlock opportunities to attract trade and investment, [and] attract capital to Guyana. It will unlock resources as well as expertise and enhanced relationships between the US business community and the Guyanese business community. It does require the US government, the Guyanese government and the private sector to come together and form a working group to figure out the details of how they want to take this forward. So it is basically, a framework, if you will, and then this working group will figure out,” Lynch added.
The group will be coordinated by senior representatives from both countries to develop a joint work plan towards the achievement of the objectives of the framework within 90 calendar days of its effective date.
“This working group will come up with a set of priorities and projects to work on and then our job will be to put Guyana together with US private sector companies to actually make those investments happen….we definitely don’t want to lose any momentum and we don’t want to lose opportunities,” Lynch further said, while noting that the group will set the stage for long term enhancement of business relations between the two nations.
At the signing, the Ministry of Foreign Affairs’ Permanent Secretary Audrey Waddell had given an outline of the agreement. “The framework will facilitate collaboration between Guyana and the United States of America to identify concrete ways to further their joint interests in infrastructure growth, integration, and energy security in order to help meet the economic goals of both countries. Infrastructure, within the context of the framework, refers to facilities and systems serving the public, including but not limited to water, energy and hydrocarbons, buildings, airports, basic sanitation, information technology, logistics infrastructure, roads, railways, bridges, ports, and tunnels,” she said.
In Guyana’s case, the US Ambassador yesterday explained that the main focus will be energy and infrastructure, two areas that both government and opposition had campaigned on. “The main focus…is energy and infrastructure. And by infrastructure—it is very broad: roads, bridges, information technology…it can mean a whole host of things. Looking forward, with Guyana being on the cusp of change, infrastructure has been on the top of the list competing parties during the elections,” she said.
‘At the top of your list’
But while the Growth of Americas agreement could be important, there continues to be the view that Guyana is tied to a lopsided agreement with US company ExxonMobil and that that will cost the country plenty. The Ambassador was asked the views of her government on those concerns and if the US would turn a blind eye to exploitation of small countries by US companies.
“Any agreement between a US company and the government of Guyana is between them. But we always encourage private sector companies, governments, do their homework on the commitments being made. We are firm and we think that, as the Secretary said, when the US shows up, we stick by our commitments. Guyana is going to have a lot of interest. There will be a lot of interest in Guyana and you will have a lot of partners,” she said.
The Ambassador said that she would “encourage Guyana when looking at any company or country that wants to invest here [to] just do its homework” and to “know what you are getting and seek the highest quality.” “I think international standards should be at the top of your list,” she added.