VP Jagdeo should release all details on oil sales

Mar 04, 2021 Letters

Dear Editor,

From Dr. Tulsi Singh’s letter (SN March 2), I take this quote: “Numbers released by VP Jagdeo three weeks ago revealed that Guyana received US$184.9 Million in profit and US$21.2 Million in royalty. Since royalty is calculated at 2% of sales, then sales were US$1,060 Million. So, Guyana’s profit as a percentage of sales was 17.4%. That is 184.9 out of 1,060 equal 17.44%” [End-of- quote].
We are trying to figure Guyana’s take as a percentage of Sales. I make two assumptions – Oil company paid the full 2% royalty on sales and deducted the full 75% as Cost Recovery. On sales of $1,060 Million (Singh’s calculated number), Guyana’s take works out to $151.05 Million ($129.85M profit-share + $21.2M royalty). But Guyana received $206.1 million.
There is a difference between what the math works out to ($151.05 M) and what was received ($206.1 M). Could it be due to the Oil Company using different royalty and Cost Recovery rates? And what about deductions for shipping and marketing Guyana’s share of profit oil (barrels of crude)?
Dr. Tulsi Singh has checked with ExxonMobil and, based on their information, he has reported that Guyana’s take is 19.5%. Much better than expected.
However, we could not be sure of these numbers. Unless GoG releases full details of Oil Sales: barrels produced and sold and full breakdown – price, gross sales, royalty, profit share, Cost Recovery, we could not be sure of Guyana’s take as a percentage.
I have read of KN reporters bugging the Oil Ministry for these reports – and have been told that although VP Jagdeo has said, “it is not a big deal,” officials at the Oil Ministry have been advising that Mr. Jagdeo has not “green lighted” the release.
I will conclude this letter with this sentence taken from Dr. Singh’s email: “The 19.5% of total sales earned by Guyana for 2020 production was a good start, considering the year it was.”

Yours truly,
Mike Persaud

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