Great news for the oil companies but the Guyanese people get nada

Nov 01, 2020 Letters

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Dear Editor,

Great news for ExxonMobil, Hess and Esso – but what about the owners of the newfound oil reserves – NADA. The Guyanese people continue to be the poorest paid people in CARICOM (except Haiti), even though we are blessed with great natural resources – Gold, Diamond, Bauxite, other minerals, amazing and coveted forest species like Greenheart, Purpleheart, Mora, Baromali (for making plywood) and so many other marketable species of logs. Our soil type is great for the cultivation of sugar, rice, permanent and cash crops, cattle rearing, and a host of other uses. Our abundance of fresh water from our pristine forest which can be sold at premium prices to many countries of the world. Added to the above blessings from the Almighty, we are now an oil producing nation. Yet, with a population of less than one million souls, we still stretch our hands like beggars for our development. Why is this so?
The only conclusion I can come to is that we have a nation that is so divided that we cannot differentiate the trees from the forest. Our politicians strive to hold on to political office by using the race card, and the population is so dumb that we surrender to them. How else can we describe such backwardness in a country that is so blessed with tremendous resources? When will Guyanese wake up from our slumber and realize that we have been taken advantage of for over 200 years. First, it was the British who enslaved our ancestors from Africa, then tricked the poor Indians out of India, while at the same time planted distrust among the two ethnic group as they began to live in a very under-developed colony of the British Empire. The Dutch did not subscribe to the divisiveness of the British. Just look at Suriname and see how well the different ethnic group lives there. Each ethnic group in Suriname maintained their language (something the British took away from us) and lives peacefully among their fellow Surinamese even though they may vote for their own ethnic group. Maybe it would have been better for Guyana if we were colonized by the Dutch.
The early leaders of our country, from Slavery and Indentureship, did put up some resistance to British rule. We have many heroes who faced the consequences of standing up to the British. Many of these heroes are of African and Indian descent. With the formation of the PPP in the early 1950’s, there was hope for the creation of a new people. The rest is history.
What can we do to work together as a people? We have great politicians on all sides, yet we cannot seem to have a cohesive force to build a united Guyana. The murder of the West Berbice boys brought out the nastiness and divisiveness in us. It is deep rooted, and I believe that some of our politicians are doing their best to make it worst. On the other hand, we are encouraged by other politicians (old and new) who are working feverishly to bring our people together. My prayer is that the latter group will prevail.
This brings me to the news from ExxonMobil that the Stabroek Block has an estimated nine (9) billion barrels of oil. I am of the view that by the time all the wells are explored within this block, we will have more than twenty (20) billion barrels of oil. The question is, “What does the people of Guyana get from these discoveries?”
The only income we are assured of is the 2% royalty from this block. With estimated production of 9 billion barrels, we will receive 180,000,000 barrels in royalty. This amount will be spread over the life of the block. Using an estimated market price of US$40 per barrel, Guyana will receive a gross royalty of US$7,200,000,000. Can we as a people demand a better royalty income from this block? The answer is a big YES. I do believe that the current Ali administration is working towards that goal. The average royalty that oil-producing countries receive from around the world varies based on the contract. Recently, we have seen Suriname receiving over 6% royalty on their oil resource, in addition to corporate tax on the profits made by the oil giants. The difference between Suriname and us is that Suriname’s oil industry is run by professionals not politicians. Will we get there? I believe that President Ali will chart a new direction for this industry, and I am of the view that we will get there soon.
With a 6% royalty, Guyana could receive US$21,600,000,000 over the life of the block – i.e. US$14,400,000,000 more than the current contract. What about the sign-in bonus? If we could get ½ of 1% on the estimated gross revenue, that would amount to US$1,800,000,000 (using an average price of US$40/barrel). Can we comprehend the gigantic leap our country can make with a better deal from our oil resource? Mr. Darsh Khusial and others from OGGN have written extensively on the lop-sided oil contract we have. Check out the website and see the great work this organization is doing. Kaieteur News has been the leading advocate for a better deal for Guyana. Sadly, the Guyanese seems unconcerned with the oil companies raping us as we continue to fight each other for political power.
Yours truly,
Charles Sugrim, CPA

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