Something isn't correct

Something isn’t correct

Feb 06, 2020 Letters

DEAR EDITOR,

The information from Rystad Energy makes no mathematical sense, or, in other words, it is complete nonsense. In their words (source: Rystad Energy’s website):
“ExxonMobil’s discovery of the Liza field in 2015 truly put Guyana on the global energy map,” says Espen Erlingsen, Head of Upstream Research at Rystad Energy. “We predict Guyana’s total oil production to surpass 600,000 barrels per day by the end of the next decade. These volumes could generate total annual revenue of $15 billion from the oil and gas industry. After all costs are paid, around $10 billion of profit could thus be split between the companies and the government.”
In the current fiscal regime, the government collects its share through a 2% royalty and a 50% profit oil levy. Rystad Energy estimates that this will give the government 60% of the profit from the various projects (government take), while the remaining 40% will go to international E&P companies.
If I remember my math from primary school, when you have a total of $15 Billion and a remainder of $10 Billion that is divided by 2, this leaves you with $5 Billion that is yours. 5 Billion as a percentage of $15 Billion is 33.333r%. Plus the 2% of the $15 Billion, which is $0.3 Billion and not a 0.3 which becomes 30%. Thus the total is $5.3 Billion which gives us a total of 35.333r% of the total revenue from the oil & gas industry per the outlined example assumptions provided for Rystad Energy’s calculation. This is a far cry from the 60% that this highly respected industry expert is miscalculating.
Obviously, the deal that was negotiated for Guyana is far below industry standards.
Best regards,
Mr. Jamil Changlee
Chairman
The Cooperative Republicans of Guyana (CRG)

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