OP-ED: Say that again – renegotiation very destructive

Feb 12, 2023 Features / Columnists, News, The GHK Lall Column

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 By GHK Lall

Kaieteur News – I thank Mr. Alistair Routledge, Exxon’s Guyana Country Head, for his words, ominous as they are, on renegotiation of oil blocks, maybe anything to do with the Stabroek Block.  “Very destructive” to investor confidence is a combination of the alarming, a warning, some form of warding off, and doing a spirited job of defending what contractually holds the fabulously rich Stabroek Block of Guyana.  As confirmed by the numbers known to date, the Stabroek Block is the stuff of legend, the kind of war stories that king of the hill oilmen speak of in awed terms in their oak-paneled drawing rooms, replete with walled trophies from their safaris from around the world.

In my view, 11 billion barrels of oil equivalents represent the first snowflakes in Guyana’s oil avalanche.  The only difference is that ours is rushing forward from below the sea, and not from some mountaintop.  We have a mountain or ocean of oil, pick one, under the seabed, would be by my nontechnical estimate.  I think that Mr. Routledge knows this, but is not sharing one barrel more than he has to, and as suits his purposes (and orders from Texas).  But, I must admit to having some appreciation for his magical spin, the thought of, and intensifying talk of, and any moving towards renegotiation would be the pinnacle of what is “very destructive” to investor confidence.

It is warming that Mr. Routledge is such a luminous presence and voice regarding investor confidence, such an indomitable champion of what is prospering to the ambitions, the visions and, ultimately, the income statements of current and prospective investors. I detect the reassuring, unyielding posture of an oilman playing to his crowd, with an eye to maintaining his company’s being seen as the darling of Wall Street analysts, banks, hedge funds, and investors.  On another note, as I absorb Mr. Routledge sledgehammer rhetoric, I am reminded of a samurai brandishing a fearsome weapon that sends politicians in Lilliputian locales scrambling to dodge the label of pariah status, as identified by threatened or thwarted corporate warriors.  It’s Exxon’s version of a reverse ultimatum.  And, Mr. Routledge got a ready convert in Guyana’s President (up next).  This is my interpretation of Mr. Routledge’s “very destructive” to investor confidence.  Just the mere mention of loss of investor confidence could send ruling politicians, and ones aspiring to be, into a tailspin.  This is despite their own people’s confidence already eroded beyond the point of destruction.  It would have been preferable for Mr. Routledge to pause and consider that barren reality of the owners, instead of talking like some American Caesar.

Now, I regret having to part company with my fellow American, and in whose company, I have interest.  I asked to be pardoned for discarding fractions and decimals.  But less than 15% percent (12.5+2)) total to Guyana for its oil registers with me as an imbalance of Himalayan proportions.  With Mr. Routledge’s permission, I shall similarly jettison the luscious creams of no taxes, that open-ended 75% gravy train involving expenses from the top, and other dollar-driven considerations that do have material impacts, mostly positive, on investors’ confidence, and at the expense of passive and helpless oil producing countries.  I am reluctant to think that the financial acumen, the corporate perspicacity, of this singular American distills to this impregnable, nonnegotiable, dead end of a maximum of less than 15% for Guyana for its now fabled Stabroek Block.  If otherwise, it would be a “very destructive”, meaning, catastrophic to the confidence of the people with money.

As I differ with Mr. Routledge, there is difficulty in appreciating how double what Guyana is earning currently (or 60% or 50% more) could be so shattering to investor confidence.  I am lacking in appreciation of how a slightly lesser profit haul from Guyana’s high-quality oil could be so devastating to the confidence of investors. Surely, Mr. Routledge has gone overboard, can be considered less than innocent in the departments of hyperbole, scaremongering, and sensationalizing for purposes of what is protective of Exxon’s interests, Exxon’s take, and Exxon’s visions of near perpetual prosperity of an unparalleled kind with Guyana’s oil trove.

I discern that Exxon, through Mr. Routledge, has taken a preemptive stand with this rather shaky line drawn across Guyana’s face.  I help with a familiar American historical moment, where some natives were underestimated at a place in Montana.  I think that we have to go eyeball to eyeball with the American oil company on this for some sensible meeting of minds, yielding.  The problem is that we lack the manpower, the mental power, the willpower, and the anatomical power to fire our own shot across the bow, and send a strong message to Exxon.  Just have the local EPA start experiencing cramps, amnesia, and a bone transplant for the better.  We shall see then whose confidence has greater staying power

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• Exxon, GHK Lall, Mr. Alistair Routledge, renegotiation, Stabroek Block

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