AFC says Govt. not telling the truth about Guyana’s real profit share

Dec 21, 2022 News

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– says country getting 14.5% after oil giant walks away with 75% in cost oil

Kaieteur News – The Alliance For Change (AFC), one of the country’s largest political parties is arguing that oil giant ExxonMobil is not being truthful to the Guyanese people by hiding pertinent data regarding production.

After issuing a staunch statement at its last Press Conference on Friday, the party has now come out to explain what it believes the country’s true benefits from oil and gas is. Dr. Vincent Adams, a member of the Alliance For Change explained in a recent interview with Kaieteur News that the country is merely benefitting from a 14.5 percent share, after Exxon bags 75 percent to cover its expenses to develop the resource.

He explained, “They said it’s 52 percent of the profits and they’re not wrong but it’s just a trickery to give people the impression that we are getting 52 percent; but it’s 50 percent of a 25 percent. After the 75 percent is taken out as cost oil, we are left with the 25 percent so they split that and we are left with 12 and a half percent and on top of that there is the two percent Royalty so that’s how we get to 14.5 percent.”

Dr. Adams, the former Executive Director of the Environmental Protection Agency (EPA) argued that the oil company is misleading the population by failing to point out the facts that they are first collecting 75 percent, then sharing a remaining 25 percent with Guyana. As such, he made it clear “that 52 percent is not what we are getting.”

On the other hand, the former Head of the regulatory body reasoned that while Guyana has been told that 75 percent is being taken out each month to cover expenses, this could very well be as much as 80 or 90 percent, further lessening the country’s share. “The 75 percent that they put there it’s just for accounting. It could be 90 percent, it could be 80 percent. This 90 or 80 percent is going over to the next month every month. Its adding up all the time so we will never pay off,” Dr. Adams said.

He explained the method of cost recovery Guyana agreed to in the 2016 Production Sharing Agreement (PSA) with Exxon, comparing it to a credit card that one uses to purchase items each month. “Imagine you have a credit card and each month you go shopping like crazy. You’re buying $100 worth of goods but you are allowed to pay a minimum of $25 so when you keep paying back the $25 but you still shopping $100 so what happens is for your entire life you’ll still owe on that credit card and it’s the same exact thing with our oil. We do not know how much its costing us and remember on top of that, there is no ring fencing so we will never get that 52 percent. Never!”

As such, he challenged the oil company to tell Guyanese the truth in the billboards they have erected across the country. In those structures, Exxon claims that Guyana is getting 52 percent of the profits from oil and gas activities in the Stabroek Block, where approximately 360,000 barrels of oil is being pumped per day. The AFC has rebutted this claim, insisting that the oil giant comes clean. At its Friday Press Conference, the party said, “How about telling us that that means you are getting six times what we are getting? How about telling us on your billboards that we may never get more than this 14.5 percent and if you disagree, how about becoming transparent and stop hiding the data that show your actual operating and capital cost plus your analysis as to when payout of these projects will occur to get us to make more than the 14 and a half percent.”

Additionally, it noted that Exxon should also communicate to the public what the 75 percent means in terms of value. The Party said it is confident that most of the population is unaware that the cost of production surpasses the 75 percent value each month, which means the country’s debt will be recurrent. Not satisfied there however, the AFC has also called on the multinational corporation to tell the nation when all of its debts would be paid off to give the country more than its current 14.5 percent.

The AFC’s statements regarding Guyana’s benefits from oil and gas comes at a time when the oil company has embarked on a billboard campaign across the country claiming that Guyana is getting 52 percent of the profits from the Stabroek Block. The Publisher of this newspaper, Mr. Glenn Lall has since challenged the company’s assertion, explaining that Guyana is merely getting a quarter of the profits due to the 2016 PSA. He is adamant that what Exxon should have been telling Guyanese on those huge billboards, is who is getting the ¾ of the apple plus the other half of the quarter apple which remains.

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