Oil don’t spoil

Jun 14, 2019 Features / Columnists, Peeping Tom

Guyana’s oil is not going anywhere. So why hurry to start oil production when the country is being shortchanged because of the poor deal it got from Exxon?
What is the rush about? The oil is not going to disappear. It will not evaporate or move deeper into the seabed. It will remain where it is, as it has been for millions of years.
Oil is a fossil fuel. This means it was formed as a result of the death of previously organic material, and over millions of years eventually developed through heat, pressure and chemical reactions into what we now call oil.
Oil is therefore not an overnight phenomenon. It took millions of years to be formed and it will not simply disappear overnight if it is left at the bottom of the sea.
Guyana’s oil does not belong to the government. It belongs to the people and they have a right to get a good deal for it. The government whom they elected had not gotten a good deal for Guyana’s oil.
Exxon Mobil has discovered an estimated five billion barrels of oil worth at present day prices in excess of US$250 billion. The government got a pittance of US$18M. In any other part of the world, the government would have been out under pressure to resign over such a paltry sum.
Then it took four years for the “Christopher Columbuses” within the government to discover that oil blocks were handed out to individuals and companies which are not among the top oil and gas companies in the world.
We are now reading about the interests in some of these handed-out blocks being farmed out to other investors. In other words, profiteering is already taking place within the blocks without any major exploration blocks taking place.
Guyana was sitting for years upon hundreds of billions of United States dollars worth of oil. And now that the people should benefit from this resource, it is being discovered that the oil blocks have been handed out to some companies which are not major oil companies. Some of the present owners are operating like landlords.
So why could Guyana not have been its own landlord? Why could not have a state owned oil compnay been established that would tender for rights to leases within our Basin?
The United States Geological Survey estimated that the Guyana- Suriname Basin contained more than 15 billion barrels of oil. That is about one trillion United States Dollars. This means that from oil alone every Guyanese is worth about $200 million.
Now if you ask the average Guyanese how he or she would manage with $200 million each, he or she would tell you that neither they nor their children grandchildren, great grandchildren and even their great, great grandchildren would ever have to work again for the rest of their lives. And mind you, the US Geology Survey was conservative.
Guyanese therefore cannot afford to wake up tomorrow and find that its oil blocks have all be handed out without any real returns to the country. Well, they really do not need to wake up and discover that. They only need to be reading the Kaieteur News which over the past few days has been reporting on the offloading of some of these oil blocks.
What Guyana needs is to put a pause on oil development and begin a thorough investigation into who got what, was paid and what was done to those blocks subsequent to them being signed over to others.
The oil within the Stabroek, Canje and Kaieteur blocks is not going anywhere. It is not to float away to another country. It will remain there.
Guyana is not going to lose therefore it should place a one-year moratorium on all oil exploration and production, pending an independent and impartial investigation into the distribution of these blocks.
Guyana must not be in such a hurry to commence oil production. Eric Williams, flush in petro dollars, once boasted that money is not a problem. This was paraphrased as oil don’t spoil. Well, Trinidad’s oil did not spoil but it also did not last forever. The oil almost done and Trinidad is quickly going broke.
This makes it all the more important why Guyana should ensure that it gets the best deal for its oil reserves. Guyana should demand a better deal so that it does not end up in the mess in which Trinidad, once the money-well of the Caribbean, now finds itself.

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