Latest update March 25th, 2025 7:08 AM
Latest News
- Surinamese invest US$516M into country’s first oil project
- ExxonMobil impact study for Hammerhead project silent on likely explosion from new pipeline
- ‘A shocking breach’: Trump officials leak military attacks to The Atlantic
- Pensioner goes missing during creek outing at Kwakwani
- Cuban national jailed for entering Guyana illegally
ExxonMobil full page ad leaves key issues unaddressed
- fails to state nation will end up paying for all its imports
Chartered Accountant, Chris Ram
- Makes no comment on being granted uncapped importation privilege
- Avoids fact that Guyana will only inherit “junk” in 40 years
After noting the concerns of anticorruption advocates regarding its privilege of uncapped importation of items, USA oil king, ExxonMobil, sought to respond via an advertisement in this newspaper’s Friday edition.
In its advertisement, ExxonMobil notes that “as a means of overall competitiveness and encouraging investment, many governments will offer tax exemptions for imports of equipment for petroleum operations. These exemptions are a common feature of Petroleum Agreements of Production Sharing Agreements.”
In this instance, the oil company fails to acknowledge that while some governments may offer these tax exemptions, there are many governments around the world which do not allow tax exemptions on machinery and equipment.
Indonesia for example is one of the many nations which removed itself from this practice. In addition, ExxonMobil fails to tell the nation that the Government of Guyana did not grant it a few tax exemptions or breaks as other sectors and companies have enjoyed over the years. What it got was a privilege to import an unlimited number of items.
ITEMS UNDER EXEMPTIONS
This newspaper had published on Tuesday, the hundreds of items which ExxonMobil is allowed to import as stated in the Petroleum Agreement it has with the Government.
With this in mind, Exxon goes on to state in its advertisement that the “listings of items of equipment are based on experience globally and not all items will be required in all operations depending on the nature of the project. Likewise, these listings do not reflect an assessment of equipment that could be sourced locally.”
There are a number of items listed in the contract which could be sourced locally. These include bulldozers, electric cables, diesel power generating systems, drums for chemical storage used at the manufacturing or processing site, engine oils, fishing tools, laptop computers, hammer wrenches, hand held tools, hooks and swivels, scaffolding, and water storage tanks.
AUDIT RIGHTS
The oil company goes on to state, “audit rights provide the government with a robust mechanism to ensure compliance with duty exemption item use restrictions. Local Content obligations including performance reporting are clearly defined in the Petroleum Agreement and ExxonMobil is committed to the support (and) the development of local supplies.”
While the company was quick to point out that Guyana’s authorities will have the chance to ensure all imports are used for their required purpose, ExxonMobil fails to acknowledge that Guyana would have to pay for these very items in the long run. In fact, when ExxonMobil is ready to submit its cost recovery claims to the authorities, the cost for all of its imports would be included.
It also fails to state and address the fact that after use of these items for 40 years, Guyana would only be left to take over “junk.”
This very point was recently highlighted by Chartered Accountant and Attorney-at-law, Chris Ram.
The anticorruption advocate stated that 40 years later when the life of the projected is expected to come to an end, the materials which would have been imported would not only be “hand-me-downs” but of little or no value to Guyana. The Chartered Accountant said that Guyana would essentially be inheriting “junk.”
“What will you do with the materials, equipment etc when they are finished with it 40 years later? (What) the people (are) practically saying in the contract is ‘when we finish using something allyuh could tek it’. In other words, we are inheriting their junk.”
The Chartered Accountant said it would be foolhardy for anyone to think otherwise.
The Attorney-at-law reminded that ‘Annex D’ of Guyana’s contract with ExxonMobil speaks to all of the uncapped items which the oil operator can import. Contrary to what some might try to tell the nation, Ram stressed that there is no similar provision which exists in oil and gas contracts signed in China and Ghana.
“There is no such provision in the Ghana agreement. Tullow (Oil plc) has published its agreement in Ghana. There is no corresponding ‘Annex D’; and same thing with China.”
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Desecration, Disrespectful, and Disgraceful
Peeping Tom… Kaieteur News- The solemnity of Babu Jaan, a site meant to commemorate the life and legacy of Dr. Cheddi... more
Weekend Cartoon
