Can we really afford to throw away $22B annually?

Jul 19, 2019 Letters

DEAR EDITOR,

To my understanding, Guyana is poised to reap 2% royalties on OUR oil production. I have read independent commentaries expressing dissatisfaction with the ‘deal’ made with ExxonMobil, and have to agree that we seem to have short changed ourselves.
According to Tarron Khemraj in his Sunday Business column of 2/26/2018, that 2% rate can see Guyana lose ‘as much as US$108M per year’. Let me break that down: our country’s leadership signed a deal saying we are fine with giving up $22,680,000,000 (twenty-two BILLION, six hundred eighty million) Guyana dollars annually.
Even the President’s Oil Advisor, Dr. Jan Mangal, was reported commenting on this at an oil and gas sector interactive discussion back on 2/26/2018 where to quote the article from another news outfit (2-8-2018, ‘President’s oil advisor says 2% royalty too low’) ‘…Guyana’s contract with oil Giant ExxonMobil can be renegotiated and the royalty Guyana is receiving is too low compared to global standards’.
Both of the analyses above were given over a year ago, and there are other commentators (economists, lawyers, accountants) who have come after and publicly shared their qualified views that this oil deal was poorly negotiated. What I find particularly disturbing is the response from the government to Dr. Mangal’s statement: “Dr. Jan Mangal, Presidential Advisor on Petroleum, is not authorised to speak on behalf of His Excellency President David Granger or the Government of Guyana”. What a way to shoot down the words of the guy who your own administration hired for advice.
Whether this can be chalked up to rank inexperience with the Oil and Gas industry (Guyana is an emerging nation) or just rank disdain for facts, one thing is clear; we can forge a better deal than the one currently in place. Maybe we do have $22 billion dollars a year to throw away, though it would be nice if that kind of money gained from oil royalties could be thrown into modernising the GPL grid, raising old age pensions to $40,000 per month per pensioner and other beneficial initiatives for our country. Politicians never seem to have money for these things when in office, but certainly make similar promises while on the campaign trail. How can we say we don’t have money if we are about to throw away up to $22 billion a year?
The next elected government should make it a priority to revisit this arrangement with ExxonMobil and work out a better deal for Guyana. If the current one was applied to a banana farm, it would be like having 100 sucker plants on your farm filled with bunches of bananas, and a rich, global company offers to purchase your bananas but only if they can pay you bonuses on 2 of your banana trees. That kind of deal is certainly bananas.
I hope to see this renegotiated before our nation slips on the banana peel of bad economic decisions and lands on its backside.

Sincerely,
Shazaam Ally
The Citizenship Initiative

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