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US$55B Could double every Guyanese worker’s salary for the next 40 years
Global Witness has put out a report stating that Guyana is set to lose US$55B in value over 40 years, due to a poorly negotiated deal with ExxonMobil for its right to continue exploring the 6.6 million-acre Stabroek Block.
But because that amount is so much, it may be difficult for one to fathom just how much money US$55B really is. To put it into perspective, like Global Witness did, Guyana’s 2019 budget was presented as $300B. That is about US$1.4B.
When that is compared to what Guyana could lose (US$55B), it becomes clear that that money could impact Guyana’s budget 40 times.
In other words, US$55B could double Guyana’s budget for the next 40 years.
That amount of value, for every Guyanese worker, would mean a doubling of all salaries… for 40 years.
For every bridge, school, or other infrastructural project Government undertook in 2019, it could build 40 more of each with US$55B.
For every good or service Government undertook to fund, it could double them for 40 years.
Attorney-at-Law Christopher Ram had also sought to put the US$55B figure into perspective.
In a release to Kaieteur News, he wrote, “It means that at the national minimum public service pay of $70,000 per month, this Government has given away 222 months’ or roughly 18 years and six months’ worth of earnings for every single man, woman and child in Guyana,” Ram said.
The attorney said that President David Granger should rethink his position on the ‘sanctity’ of the Stabroek Block license granted to ExxonMobil and its partners, and renegotiate the “improper” agreement which was signed under the “strangest of circumstances”.
“He has a duty to this country to show leadership, commonsense, strength, patriotism – a duty to restore… our patrimony which his Government meekly surrendered,” Ram wrote in a letter.
The firm, Global Witness, commissioned to conduct the analysis, OpenOil, has released a report and a detailed economic model to support the (US$55B) figure. The firm assumed a US$65 price per barrel of oil for 7.9B barrels of oil. That extended over the fiscal terms of the Stabroek Block deal, determines that Guyana would get about US$168B.
Then, it came up with fiscal terms it considers in keeping with industry norms, what would be called a fair deal, and found that that would get Guyana US$223B. The difference between those two shows that Guyana could lose US$55B.
In its report, OpenOil in providing its detailed economic model for public scrutiny, has acknowledged the potential variance in the oil price. Nevertheless, its projections show that the loss for Guyana is very likely to be in the vicinity of tens of billions of US dollars.
When OpenOil reached out for ExxonMobil to comment on its projections, its Guyana Country Manager, Rod Henson, responded with a letter, rejecting the firm’s calculations.
Supporters of the deal, including Government officials, have touted a recent Rystad report which states Guyana will get 60 percent of oil revenues, instead of 52 percent, as calculated by OpenOil. However, unlike OpenOil, Rystad’s figures are unjustified, since it has not published its economic model.
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