Uproar against Exxon’s billboard justified

Dec 22, 2022 Letters

Dear Editor,

The uproar against Exxon’s billboards is justified. There is no way they can make such a claim with a straight face. Even the expense to decommission a well is yet to be discussed. One can only imagine what additional problems exist in their expenses which have yet to be properly audited.

How can you collect a $100, give us $2 off the top then pull out $75 and split the $23 left and then look us in the eye and say that the $13.50 we have received is 52% of the profit when at the end of the project, you will charge me an additional amount which I will have to pay out of the $13.50 received. The $75 in expenses also includes your overhead allocation and the required cost of capital for the investment.

What is even worse is that the $13.50 is at risk of being further reduced because the expenses are also at risk of growing at a rate that outpaces the revenue, and if a major oil spill occurs without the proper insurance being in place, the $13.50 may become negative. Guyana cannot afford to lose money while increasing depth and watching our suppliers leave with the lion’s share of the profits. Anyone who says that we are getting more than half of the profit is misleading the public, especially when you consider that all of the expenses are not in the calculation. Whatever we receive with the current calculation will reduce over the life of the project when decommissioning of the wells is completed. I hope we are taking the time to audit their expenses properly.

This company’s mathematics is proving to be similar to that of the Opposition’s. Finding half of a number is now also a problem for such a major corporation. The Government needs to sit down with Exxon and work out the kinks in the agreement. Add the insurance, the decommissioning cost and the ring-fencing of the expenses. Reintroduce the taxes and negotiate a price floor for the oil produced. Exxon knows what a fair deal looks like. Asking nicely is not the only way to create a win-win at the negotiating table.

The EPA needs to be leveraged and the fines imposed for the pollution caused by the industry needs to be substantial to compensate for the gaps in the agreement. Withholding the production license for newly discovered wells will surely bring the company back to the negotiating table for the current and future agreements. Our leaders know that the lack of integrity of the opposition in the negotiations with Exxon also played a part in the opposition’s loss of power. Making the same mistakes also have consequences which must be avoided.

With concern,

Mr. Jamil Changlee

Chairman

The Cooperative Republicans of Guyana