Coronavirus deaths and sagging oil revenues

Apr 16, 2020 Letters

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DEAR EDITOR,

As I reported (KN April 14), the number of Coronavirus cases among Guyanese in the US was underreported. More and more deaths have been reported in Guyanese communities all over the US, in some cases multiple members of families, especially among the older folks.
New York City Governor Andrew Cuomo on Tuesday confirmed that there were an additional 3,800 deaths that occurred at people’s homes and nursing shelters that initially were not classified as Coronavirus-related. But now, they would be included in the count of Coronavirus deaths.
Still, actual positive cases and reported deaths from Coronavirus are undercounted throughout America. The homeless and so many others who passed away have not been tested. There aren’t enough kits to test everyone who showed flu-like symptoms and/or who died. Health authorities do not wish to use precious, scarce kits to verify if people died from Coronavirus; pneumonia or flu is enough for cause of death on certificates.
America’s health and nursing or senior centres have been overwhelmed with the disease; they are understaffed. They cannot cope with the numbers of cases. Nursing and senior centres are not equipped to do testing or to treat people with ventilators. Thus, many quickly die.
The death rate at senior centres in America has been staggering – running at almost 50% in the greater New York area, according to media reports. Health authorities are trying to move seniors away from their shelters to safer places, but space is a serious challenge for the governments. Even funeral homes are overwhelmed, rejecting countless requests for funerals. Guyanese families (including Muslims that require immediate burials) are known to wait up to two weeks before loved ones are buried or cremated; rites are short and attendance severely restricted.
As more testing is being done, the number of positive cases keeps rising rapidly. The death rate is also likely to peak, because there is no confirmed cure for the disease. People (including my family members) are experimenting with antibiotics, flu pills, and home-made cures; traditional home-made medicine (from fever grass, citrus peel, black pepper, etc.) seems to have a positive effect.
It would not be surprising if the actual number of Coronavirus cases in Guyana may also be underreported. Because there has not been enforcement of strict social distancing and not enough kits to test those showing symptoms of the virus, the actual number of reported cases in Guyana could be substantially higher.
Guyana lacks the capacity to test for Coronavirus. And a month after, a request for a soft loan of US$5M from the World Bank has been ignored – probably because of the fraudulent election count.
The Coronavirus is severely impacting on oil revenues for Guyana. As Darshanand Khusial (Apr 14) explained, since the spot price for oil is hovering around $20 a barrel, Guyana will only get around $20M for its March lift of one million barrels, which is around a third of what it received for its January lift of 1 million barrels.
KN reports that China will snap up the oil for less than $10 a barrel. This means the actual revenues for March would be even much smaller than is projected. Major world economies that consume a lot of oil are now projected to open later in the year rather than in a month or two.
Oil prices will not increase substantially for another two years when demand increases to rebuild shattered economies. By then, alternative energy sources will kick in – India and China, two of the largest consumers, are moving to solar, wind, coal, thermal, and atomic sources of power. Europe is also moving away from hydrocarbons.
Oil prices are not expected to climb significantly over the next few months. The prices are stalled around $20, even with efforts by OPEC and Russia and US to prop up the prices through cuts in production. Based on new projects of $20 a barrel, Guyana may not get US$200M from sale of its share of oil, and from 2% royalties and 12.5% profit sharing for years to come.
There is not likely to be any significant profit, since oil is selling below costs, and Guyana will have to pay for the difference in production costs and revenues collected for the sale of oil. Thus, there is nothing much to collect from profit. And the 2% royalty is given to government after all costs have been deducted; not much to collect from royalty either.
The terms of the agreement of the oil contracts on royalties and profit sharing, as well as on selling Guyana’s portion of the oil, expose how terrible a deal the government signed and the lack of negotiating skills in securing guaranteed prices (long-term contracts) for its share of oil.
Yours truly,
Dr. Vishnu Bisram

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