Superefficient oil agreement

Oct 29, 2021 Editorial

Kaieteur News – The Chief Executive Officer of Hess Corporation, John Hess, had a lovely moment in the sun. CEO Hess spoke of the “superefficient” oil agreement with Guyana, and we at this publication say that Mr. Hess was not exaggerating (KN October 28). If anything, he could be charged with understating matters a bit, so favourable is the oil agreement, to which he referred, for Hess and other foreign oil powers. Because it is “superefficient” in terms of breakeven price, and the outstanding returns promised to shareholders, this means that somebody is getting less, or next to nothing in one of the most terrible deals in the century long history of oil. That somebody is a country and its people. Guyana is the loser. What is “superefficient” for Hess and Exxon and others is super-crippling for Guyana and its hundreds of thousands of hopefuls.
CEO John Hess had the stage all for himself, and he had all the meat for the quarterly earnings call. American companies live and die by this most watched, most sensitive of metrics. Wall Street analysts can be brutal, and CEOs fear them, when they have bad news, such as falling short of expectations of analysts, not meeting targets set. It can be a baptism of fire, with share price tumbling when bad news is delivered; and the heads of CEOs on the chopping block, when they come across as clueless, or lacking what it takes to get their companies on the right track. That is, deliver on what was promised, present what is realistic, and articulate in an authoritative manner what is accurate.
Mr. Hess would have done his homework well, knowing full well that he would not be looked upon too kindly, if he appeared to be fudging the facts. On this occasion, John Hess of Hess Corporation had all the ammunition on his side and going for him. He had so much that he was gracious enough to allow his company’s Chief Operating Officer, Greg Hill, to join in the festivities, and help share out the holiday cookies. It was that kind of atmosphere in the recent earnings call.
In COO Hill’s blurb, the smooth example of a seasoned corporate pitchman, there was the gushing: “…Exxon is doing an extraordinary job I think of utilising this ‘design one, build many, strategy’ to deliver efficiencies.” Exxon and Hess must have paid several million American dollars for that piece of company froth for the consumption of Wall Street analysts. Of course, Guyana is paying for that, but we are yet to know where it is (or will be) buried in the bills to come. The oil powers have studied their pluses and minuses so keenly that they now believe they are well positioned to manage inflationary pressures, and that “any cost increases will be rapidly recovered.”
It was along the same lines that CEO John Hess delivered his icing on the future earnings cake: “this development has simply outstanding financial returns. Some of the best in the industry…” He was talking about the US$9B Yellowtail Project, and the rosy outlook it represented. Other countries get green with envy over something like Yellowtail, while Guyana, on the other hand, gets yellow with jaundice from what weighs it down; what it loses out.
While Exxon, Hess, and partners are winning, we are losing out, and on many fronts. Hess faces Wall Street earnings, and articulates a glowing oil picture, thanks to Guyana. Guyanese leaders run and hide, falsify and conceal almost everything material about the nation’s oil. More than a year later, Guyana’s political opposition is speechless, since it has nothing sensible or useful to say. One year and more in Government, and Guyana’s leaders of today are skating and diving for cover, with the President and Vice President getting so good at both, they could qualify for the next Olympics.
The leaders of foreign oil companies can face the public and share their good news. Guyanese leaders are so anaemic with truth and frankness that they quarantine themselves, and put on masks to seal their lips further. Oil companies have a “superefficient” agreement that guarantees profitability. Guyanese have a superbug Government to live with, which condemns them to poverty

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Superefficient oil agreement

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