Guyanese beware, more than one powerful enemy

Feb 07, 2021 Editorial

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Kaieteur News – Guyanese are familiar with one adversary with which we are locked in a longstanding border controversy. That adversary is visible and loud and, all too often for comfort, what it can be about is more than sabre-rattling – it has been openly hostile, with accompanying belligerent actions. But the known menace of Venezuela is not the only one, for there is another, and it is in America.
In fact, that more subtle, but no less undermining presence to Guyana’s interests is not only headquartered in America, but it also has huge and formidable footprints in dozens of countries dotted across the globe. Those footprints should remind of the Yeti, aka the Abominable Snowman. That adversary of things beneficial to Guyanese welfare is the incomparable global titan called BlackRock, Inc. To furnish some context for the ordinary citizen, BlackRock has over eight and a half trillion American dollars of assets entrusted by its shareholders to its skilled and sophisticated management. Those deep-pocketed investors are all about yields: that is, they want rich returns from every dollar that they invest.
What should be particularly noteworthy to Guyanese, who follow our oil story and all of the related developments, BlackRock is one of the top three investors in oil giant ExxonMobil, with an equity stake of almost three hundred million shares (over 6%) of the company. To cut this to a very fine point, BlackRock owns more oil and gas reserves than any other company in the world; and it is also the biggest investor in polluting coal plants.
BlackRock’s portfolio managers do not weigh so heavily in favor of any company or sector, unless they are near certain of its prospects. After all, it is answerable to its own shareholders, who are all about better and better returns, and have been clamoring for more. Stated differently, the underlying investors in BlackRock (and other hedge funds and private equity funds) are not happy with how Exxon has performed, and where it stands regarding future dividends, and possible share appreciation for capital gains.
This has placed BlackRock on a tightrope, which its top management has been careful to navigate smartly. Early last year, the company’s CEO, the well-respected Laurence Fink, took a position that “environmental sustainability” would be a cornerstone of where, how, and with whom BlackRock’s investment funds could be placed. That was all well and good, and led to warm feelings for BlackRock, but its subsequent actions have not been enough to continue the former confidence that was manifested, regarding the company’s seriousness and real priorities. For the facts are as follows: BlackRock had committed to offloading US$500M in coal holdings, which is an encouraging start, but still only a drop in that polluting bucket; but there is something else which must be given close attention. According to Morningstar, in 2020 shareholder resolutions (concerns, priorities, and so forth) fell to 14% from 25% in 2019. In other words, less of BlackRock’s investors held climate change as high as before, falling from 1 in 4 to 1 in 7, which is almost a 50% decline.
Now, all of this forces to a sobering reality. Although concerns about climate change have been an unfaltering presence, from a company (and investor and Wall Street) perspective, this truth should be faced straight up: it is a pain, a distraction, a nuisance, and a dilution of the best that can be had from money invested. To some extent, it can be posited that concerns about climate change are more of lip service, and less of determined actions to remedy the situation. This is what Guyanese of every walk of life in this country have observed of Exxon.

There is indifference to the point of disinterest, even stubborn resistance, by Exxon over its damaging and costly gas flaring activities. Exxon’s aggressive attitudes, and uncaring actions, are hostile to what is beneficial to Guyana. Exxon’s quiet, but no less determined; gas flaring production practices in our recently discovered fields fly in the face of what the world is pushing for with increasing urgency. Because Exxon is of what does not diminish, but helps to boost, the company’s bottom line. This is what makes it an enemy of Guyana; one that is inside our gates, and that is already wreaking a trail of destruction that spirals into environment and atmosphere.
Exxon’s investors ought to be very pleased, since this helps the oil giant to be restored to its former place at the top of the oil powers’ hill, and where it counts. That is, through earnings and investor returns. Of course, this comes on the backs of Guyanese, the drain on the national purse, and the blot on our reputation as an oil-producing nation. When all this is considered by Guyanese, it should be clear that we do not have only Venezuela breathing down our necks, and throwing around its weight. We also have Exxon ripping our guts out and draining our lifeblood’s away, while pretending to be a saviour and friend to this country.

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