…ExxonMobil to get 60-65% profits
Rex Tillerson, the former Chief Executive Officer (CEO) of ExxonMobil, is now a threat to Guyana’s oil and gas industry as he takes up the post of United States Secretary of State later this month, since he essentially will be writing the rules that will govern the US multi-billion-dollar transactions between the two countries, given his connection to the US-based oil giant.
In fact, the internationally renowned Huffington Post recently argued that were Tillerson to take up the post of US Secretary of State, he was inarguably poised to position ExxonMobil to further benefit from the Guyana oil find – using the law.
The Huffington Post article outlines the fact that in the face of the huge oil find by ExxonMobil offshore Guyana, the country has no real framework for regulating multi-national oil companies like Exxon.
The article, titled “Conflict: Tillerson would write the rules for Exxon’s major oil find in Guyana”, was written by Jesse Coleman, who the publication listed as a researcher and writer for Greenpeace USA following fracking, the oil and gas industry, and corporate power in politics.
The Huffington Post article said Guyana’s foreign partners stood to earn 60 to 65 per cent of profits, a far larger share than what more established nations are willing to offer investors.
This makes Guyana a much larger and economically important find than Exxon’s holdings in Russia, at least in the near term.
According to the US-based news agency, the Guyanese Government faces the prospect of regulating a company with an annual profit margin that is over five times larger than the country’s annual Gross Domestic Product (GDP).
“With no technical expertise in offshore oil drilling and no experience handling super-powered corporations, Guyana faces the real possibility of suffering the resource curse, in which a place with massive resource wealth is pillaged and left for broke by bad management and predatory colonial practices.”
The article outlines too that the US State Department has recognised this dilemma and under Secretary Hillary Clinton, set up a programme called the Energy Governance and Capacity Initiative (EGCI).
The programme aims to both promote fossil development and prevent the “resource curse” by providing “independent oversight” of the oil and gas industry in nascent oil states.
The programme is currently helping the Guyanese Government write profit-sharing agreements, environmental regulations, and develop a strong rule of law to counterbalance corporate power.
According to the Huffington Post article, “There is righteous critique of this from people who say the main outcome of such a programme would be to help Exxon profit from Guyana’s resources under the patina of rule of law…While that critique may have been valid while Hillary Clinton was Secretary of State, it will be an inarguable fact if Rex Tillerson assumes the Secretaryship.”
Efforts by this newspaper to contact current Natural Resources Minister Raphael Trotman were futile.
Meanwhile, the Huffington Post article further observed, “It seems unlikely, bordering impossible that Tillerson would, or even could, recuse himself from his conflicted role.”
It was outlined that in his nomination hearing, Tillerson said he would recuse himself for one year from carrying out foreign policy that deals directly with ExxonMobil.
“Considering Exxon has dealings in nearly a third of the world’s countries, a strict adherence to this promise would cripple the State Department…Tillerson’s worldview will be responsible for prioritising environmental and profit-sharing regulations affecting Exxon.”
According to the Huffington Post piece, “The unavoidable outcome of this is friendlier rules for Exxon, rules that prioritise production over the environment and corporate comfort over social justice.”
The news of the looming conflict of interest scenario when the former ExxonMobil CEO takes up the post of US Secretary of State comes on the heels of a denial of accusations that the oil giant was, in fact, a financier of the David Granger-led coalition A Partnership for National Unity/Alliance for Change (APNU/AFC) campaign.
---
