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The betrayal that beckons the resource curse
Dear Editor,
A recent article in KN, November 27th: “GPL in race against time to find heavy fuel oil supplier”, offers a reality check, a chance for every Guyanese to reflect on how bad a deal the Coalition Government signed with ExxonMobil and partners in the Production Sharing Agreement.
I am convinced that 70 percent of the population does not know that HFO “heavy fuel oil”
(crude oil) is the same kind of oil as the estimated six billion barrels that sits in the Stabroek Block under the control of ExxonMobil and partners.
The Coalition partners (APNU/AFC), while in opposition, had refrained from giving Parliamentary approval to Blackstone, an energy company to build the Amaila Falls hydro project.
Having instigated the termination of the Amaila Falls project, it is logical to assume that they had known before 2015 that Guyana would be dependent on fossil fuels for the generation of electricity, indefinitely.
Every politician, and citizens would be aware that there had always been a hue and cry over the high cost of our fuel bill – to operate GPL generators and general consumption in the country.
Our oil bill had always been a plague on our foreign currency reserves.
Days before the 2015 elections, ExxonMobil announced a huge discovery, somewhere in the vicinity of 3.5 billion barrels.
Guyanese were ecstatic. Visions of cheaper fuel and electricity bills were on everyone’s mind.
It was imperative that anyone entrusted to negotiate with ExxonMobil, on our behalf, to grab some of this ultimate energy resource (oil) for the benefit of our people.
This should have been like “taking candy from a baby” for any negotiator, by virtue of our endowment (ownership of the resource) through royalty.
The Coalition had disappointed the people with a mere two percent and to add “salt to our wounds” that two percent was not negotiated as collectable at the top of the production line, in the true sense of royalty.
This deed by the Coalition negotiators, practically nullifies our endowment (ownership to the resource). This was, and remains a betrayal that beckons the” resource curse” by the Coalition.
According to the article, GPL needs 30,000 barrels of HFO every 12 days.
Simple calculations suggest that GPL uses 2500 barrels of HFO per day. I shudder to think what the country uses daily in LFO (diesel, gasoline etc).
ExxonMobil is scheduled to begin production in weeks.
If Liza Destiny could achieve its target of 120,000 barrels per day, two percent royalty on that amount would be 2,400 barrels per day.
If only the Coalition had negotiated the two percent royalty in its true sense, our power plants could have been running on our royalties on phase one alone, in a short while. When we thought two percent was the bottom line, the said Coalition granted Tullow Oil a one percent royalty and a chance to recover same – a total give away. Should these people be given a second chance?
Rudolph Singh
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