The most unpardonable crime ever perpetrated by any government on its people

Feb 12, 2020 Letters

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DEAR EDITOR,

Guyanese have now come to realise that the APNU/AFC has committed the most unpardonable crime ever perpetrated by any government on its people. It should be labelled the crime of the century and the mother of all corruption. It is the crème de la crème of corruption.
It is the Exxon deal which was dictated by Exxon to the Coalition Cabinet, which the Cabinet approved and which the negotiating team took to ‘negotiate’ with the Exxon high profile team at Exxon’s Headquarters in Texas. Is it not criminal that the Cabinet allowed Exxon to dictate the terms of negotiation?
It has been years now since the various media have been publishing vast reports backed by credible analyses and evidence bemoaning the ridiculous Exxon deal while the Coalition continued to paint a rosy picture of the numerous benefits that Guyanese will receive. In fact, they claimed that it was the PPP/C Government, which negotiated a bad contract and they must be commended since they improved on it.
More specifically they claimed that the previous Government negotiated a 1% royalty and they increased that to 2%. That’s a 100% improvement they claimed. But what they failed to tell the people is that the contract the PPP/C government signed was a Petroleum Prospecting and Exploration contract which is governed by the Petroleum Act, and moreover, that Contract had already expired when the Coalition signed the Petroleum Production contract, and so they should have negotiated a better deal, since that contract will last for 40 years.
Now that the quantified financial loss to Guyana is in the public domain the figure is staggering and astronomical. Over the 40-year period Guyanese will lose approximately US$55 billion. This can go upwards when other costs are considered.
This study was done by OpenOil and was commissioned by Global Witness, a non-governmental organisation. However, Guyanese had already been made aware of the many exploitative clauses in the PSA, for instance, the absence of ‘ring fencing’ which allows Exxon to transfer costs from unsuccessful wells to those that actually are successful, thus reducing the profits to be split; the lack of oil spill contingency plan which can see Guyana paying billions US dollars compensation (the BP oil spill in the Gulf Mexico cost US65 billion); pre-contract costs of US$960 million and US$3.5 billion more for development costs; US$15 billion in Corporate income taxes and US$5 billion in VAT; the meagre 2% royalty and the paltry US$18 million signature bonus.
It is also no secret that we will be having a nightmare to audit the pre-contact and production and other costs, not for want of local expertise, but to guard the ‘deal’.
It was disclosed that a UK firm, IHS Market Limited was contracted to do the audit. No cost was given. These audits need to be accurate and reliable, since Exxon can recoup as much as 75% costs leaving us to share 25% of the remaining profits.
According to an IMF Report, Guyana will not be receiving profits from ExxonMobil’s Liza Phase 1 project, since costs from one project can be carried over to the next one. Since 2016, there have been 16 major oil discoveries. Will we ever get the costs right? There are also many questionable costs which have been allowed.
Since the Global Witness Report, ‘Signed Away’ has been published, the Coalition has been busy trying to do extensive damage control. Now they are saying that getting maximum revenues from Exxon was not the Government’s main aim, yet one minister in August 2019 had admitted that, ‘Guyana could have done SOME things differently!
Furthermore, they are still holding on to the Venezuela/Guyana Border issue as having influenced the alacrity with which the Contract was signed and the foregone benefits. This has been refuted by the outgoing Public Relations Officer for Exxon, Kimberly Brasington, who gave an assurance that her Company is not in the least worried about Venezuela and the border issue with Guyana, and that Exxon has worked a number of years around the world and border controversy is nothing new.
Furthermore, OpenOil made it clear that the ‘world class’ discoveries should have influenced the negotiations in Guyana’s favour to access a better deal, and both Guyana and Exxon should have benefited from the de-risking, but only Exxon did. The Report has shown that Guyana should have gotten a share of 65-85% which is normal (a study was done with over 100 different countries and included data from the IMF and other studies) but as it is, our share is only 52%.
This can be changed if right thinking Guyanese remember this when they vote 2nd March.
Yours sincerely,
Haseef Yusuf

 

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