Accepting pennies for our US multibillion-dollar prize

Aug 25, 2019 Editorial

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The Hess Corporation sits like an oil king, one restored to robust health. It was losing money hand over fist, but now stands to rake in an estimated US$6.6 billion in the near future. To give an idea, that’s trillions in Guyana dollars, and that’s for its mere 30% stake in two local oilfields. This was as reported in the Wall Street Journal on August 20, in an article subtitled, “Shares surge thanks to minority stake in a South American megaproject.”
Staggering and shocking are some of the less furious words that should come to Guyanese lips when they read of what Hess ALONE will reap; and appreciate fully what was lost by us, and now to be gained by Hess.
Guyanese must truly understand that we have given (and still are giving) away of our depleting resources. Hess lost “more than US$11 billion” in the last five years; now its “30% stake in an immense oilfield…appears poised to become one of the most lucrative megaprojects in years;” most lucrative, as in billions in US or several trillions in Guyana dollars. The numbers are so stupefying that regular calculators cannot hold the number of digits involved.
As one example, if only we had scored another way through negotiating, say, a 20% royalty on our light, sweet crude, we would be talking about a comfortable $4.4 billion (US) of the total anticipated returns (US$22 billion) from the Liza 1 and Liza 2 bounties. This would have allowed Guyana to do so much, so quickly. As examples, here is a short list of options and possibilities.
First, that $4.4 billion (US) would allow us to ‘end’ the dreaded, sickening blackouts, which come with a price tag of US$110 million, as estimated and made public by the Jamaican-born CEO of the GPL, Inc., Mr. Albert Gordon. It is just around an approximately measly 2.5% of Hess’ multibillion-dollar cut, which would bring a lot of light to this long dark land.
Second, there is that expensive US$200 million albatross called Skeldon Estate that is weighing down and slowly strangling Guyana, and which could easily be liquidated. This nation shakes off a cross and burden, which releases it to have a freer hand in what is envisioned for that operation.
Third, there would be funds to cover for the US$150 million CJIA renovation disaster, that increasingly looks like a plane to nowhere. Fourth, the same could be said with confidence for the Amaila Falls road to nowhere (also). Fifth and sixth, with prudent management, there would be absolutely no need for borrowing for either the Ogle to Diamond bypass or the new Demerara River Crossing, which is still on the drawing board. In sum, ALL existing debts could be cleared in full, AND major new capital projects funded without incurring a penny in borrowing.
But a theoretical 20% royalty could do still much more and still have more with spare change left over. There would be enough change to adequately compensate our distressed sugar workers and underpaid public servants and joint services. Perhaps, subsidies on such everyday staples as electricity and cooking gas could be considered; as well as more relief on education, healthcare, and taxes. And how about funding our other modest infrastructural undertakings countrywide?
Of course, all of these projects and actions can only come to fruition, if Guyanese politicians overseeing ‘first oil’ put Guyana first and hold first the interests of all the Guyanese people. If put into practice, through giving the highest priorities to national social pluses, it would be getting the biggest bang for each dollar spent. These projects and priorities exist now. Address them and fix them. The other visions circulating in heads could follow later.
Come to think of it, citizens, all of them, could eventually enjoy a better standard of living than even that of the mighty Saudi Arabia.
In the same vein, the local budget was US$1.5 billion. On the other hand, the oil powers are boasting about profits after tax almost fifteen times that amount! No wonder, The Wall Street Journal, that beacon of capitalism’s glorious lights, saluted the latest grand discovery of oil by Hess in Guyana.
The shareholder swells in the swank Upper East Side of Manhattan are beside themselves with ecstasy. Meanwhile, the wretched classes in the lower latitudes that is Guyana are upside down in dismay and disgust as to how illiterate we have been regarding what we have. Life could have been more manageable after all the hardships and struggles.
Unfortunately, a pitiful scrap with a bone inside was thrown the way of Guyanese. We chew contentedly and growl ferociously at anyone daring to come closer to see what it is that we really got. What we got is this: pennies for our US multibillion-dollar petroleum prize; pain and poverty for our peoples.
Here is a Guyana blessed with Black Gold; and the story of that same precious gold sold by this government and that other one for a garden that gives only grief. Oh, so much could have been done…. Perhaps, still possible, remotely so…
Amidst the excitement (and anger) over this article in the Journal, a word of caution is appropriate. A 20% royalty cut (admittedly, an aggressive figure) is sure to encounter severe resistance. For, as the Journal pointed out, Hess “will have to keep up with the spending that Guyana’s abundance will require” and to the tune of “more than $11 billion dollars over the next ten years.” The company’s 30% stake means it would have to contribute some US$3.3 billion, which could offset some of its projected US$6.6 billion profits coming.
Nonetheless, it is this publication’s position that a fairer, more attractive piece of its prize should come to Guyana.

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