Government Member of Parliament (MP), Sanjeev Datadin has criticized renewed calls for the renegotiation of the Production Sharing Agreement (PSA) between the Government of Guyana (GoG) and the ExxonMobil-led consortium for the Stabroek block, asserting that such demands disregard, “clear legal principles and a sensible look from a realistic perspective.”
Datadin specifically addressed recent comments made by Chartered Accountant Christopher Ram, accusing him of presenting theoretical arguments that fail to consider the complexities of real-world contract law and the broader implications for Guyana’s investment climate.
“The arrogance of advancing arguments which read well in textbooks (second rate texts) but have little or no bearing in the real world is naive. It demonstrates a misunderstanding of contract law and reality; it ignores the destabilizing effect such a course would cause to Guyana’s reputation as a safe place for foreign investment,” Datadin stated.
Datadin underscored the substantial benefits Guyana has gained due to the pace and scale of ExxonMobil’s investment, echoing Vice President Dr. Bharrat Jagdeo’s position on maximizing oil extraction before the global shift to greener energy renders such resources less valuable.
“It benefits no citizen to leave the oil in the ground when it may only yield meager returns in the future,” Datadin said.
The government has maintained that honoring the existing contract, signed by the previous administration, ensures the continued development of the oil and gas sector without risking a decline in momentum due to disputes with ExxonMobil. Vice President Jagdeo has previously highlighted the challenges of renegotiating without mutual agreement, warning that unilateral attempts could trigger disputes and harm the sector.
Similarly, Datadin stressed that any renegotiation requires the consent of both parties. He further argued that public pressure for renegotiation could amount to duress, rendering any resulting amendments invalid.
While acknowledging Ram’s recognition of the principle of sanctity of contract as a potential obstacle, Datadin criticized him for not adequately addressing its significance.
“It seems he has not recognised the sheer force of the principle in the civilized world. Its breach would have dire consequences and make Guyana an unfavorable place for foreigners to invest … a pariah state,” Datadin warned.
Further, Datadin pointed out the binding nature of the stabilization clause within the agreement, which protects ExxonMobil from any adverse financial impacts resulting from changes to the contract, laws, or even the Constitution, without full compensation.
Datadin also acknowledged widespread criticism of the contract as favouring ExxonMobil but outlined that contract cannot be voided simply because they are perceived as unfair.
