Grim inter-related oil and virus realities

Apr 22, 2020 Editorial

More and more the deepening gloom of the collision (in some sense, it may be the combination) of oil and coronavirus brings overwhelming fear and great psychological consternations. This applies when the two are contemplated at both the personal and national levels, with the economic fallouts sensibly weighed. Part of what follows is based on, “Guyana would be lucky if it gets anything around US$60 million for next three oil lifts -Finance Minister” (KN April 21).
First, the US$55 million reported deposited in the Sovereign Wealth Fund (SWF) held overseas can only be accessed under certain extreme conditions, among which are wars and pandemics. To be precise that would be for some slice of the amount held in escrow currently, and not all of it. Any slice would make a difference for the many expensive circumstances crying out for much-needed financial assistance. Guyana should qualify to be functioning under pandemic conditions, even though the full force of such battering has not yet been unleashed nor experienced.
Second, on that sensitive matter of “anything around US$60 million for next three oil lifts,” the Hon. Minister was wise enough to further qualify “anything around US$60 million” with “lucky.” Indeed, this country will be more than lucky if it gets anything at all from our oil, which has caused so much cursing and so much anger. For, as should be known by now, the US$55 million was paid to Guyana’s SWF when oil was hovering in the high 40s and low 50s, which was a while back. In recent times, prices have been a far cry from that encouraging number.
Third, and to draw closer to the reality of current prices, the West Texas Intermediate futures are in negative territory, which means that sellers (Exxon and Guyana at the top end) would have to PAY willing buyers should those oil futures for other months stay in negative territory. If it were to stay marginally above zero, then continuing future lifts are no longer a meaningful economic proposition. We say willing buyer because, those so interested have no place to store the oil, and if and when they do locate such spare storage capacity, the price is at steep premiums. In ordinary terms, they are sky high.
In effect, this could translate to what the Finance Minister went to great pains to point out in very careful language. That is, we would be lucky to get something. There were reports and sentiments that Exxon would be continuing production in the blocks where pumping was taking place. That would be suicidal, given current market pricing conditions.
We wish to return to that US$55 million already in Guyana’s account. Even if 25% of that could be approved for release, it would mean around almost three billion Guyana dollars that would be made available for Guyana to utilize in hard pressed areas. For certainty, this should include primarily medical supplies, assistance for laid off and cash strapped workers, and small businesses forced to close, and all of which are in dire need of an early helping hand.
But for this to happen would require a move to parliament and the necessary clearance to be put in place to meet the contingency at hand. Returning to parliament means that both the caretaker coalition government (deemed illegal in some quarters) and the opposition have to fill the aisles of the National Assembly to conduct the business of the stricken Guyanese people in this their hour of desperate need.
Rather regrettably, such concerted thinking, combined movement, and unified action do not look anywhere near close to be even on the outline of the drawing boards of both groups of squabbling and furious politicians. There is little indication or encouraging evidence of hard and determined decision-making in the works, which could lead to some optimism that they will get there quickly and do the right things still more quickly.
The real severe pains of the peoples of this country are still to come. In the interim, our political behemoths are locked in a death struggle for ascendancy. As they do so, the oil diminishes in price and its value to us, while thinking citizens wonder what their fate will be.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News