How oil companies use Guyana’s oil to pay for their children’s education

Mar 19, 2023 News

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Kaieteur News – Kaieteur News, has in recent years been routinely exposing the many ways in which the oil companies, particularly the three producing from the Stabroek Block, have been utilizing loopholes in the Production Sharing Agreement (PSA)—oil contract—to exploit the country’s oil resources.

Compounding the situation is the fact that the nation’s oil resource is in fact being used, to facilitate the further exploitation of the country and its people.

The damning revelation was made pellucid during a meeting on Wednesday last, at the Georgetown International Academy (GIA), an American private co-educational day school in the capital city.

At that meeting, which was held with the Board Members and parents of students attending the school, it was disclosed that the learning institution is gearing to hike its already high school fees.

The students that attend GIA are largely children of expatriate workers linked primarily to the oil companies, together with children that would have been born overseas, but to Guyanese parents.

This publication understands that the fees presently being charged for High School level grades is some US$16,000 or just over G$3M yearly.

This fee is being proposed to be hiked by almost double in some cases, with those presently paying US$16,000 annually, now being asked to pay US$28,000 or almost G$6M.

Parents at the meeting were told that the curriculum being offered at the school is being done at international standards.

This was vehemently objected to by some parents who not only pointed out that what is being conveyed was inaccurate but that similar increases in the United States of America (USA) was only being raised by about seven percent, while in Guyana the school was looking to hike the fees by almost 200 percent.

The session became even more heated when it was disclosed that the Chief Financial Officer for the school, is in fact the Secretary for Esso Exploration and Production Guyana Limited (EEPGL), the operator for the Stabroek Block.

This led to the nexus being drawn between the provisions in the contract and its direct relationship with the school, its board members and the way it is financed.

Under the terms and conditions of the existing PSA that the administration has publicly dismissed renegotiations for, the fees for those students related to the oil companies, their contractors, sub-contractors and affiliate companies, are paid for using Guyana’s oil.

Compounding that situation is the fact that, the actual cash paid over to GIA, is recovered as cost oil, from the 75 percent of oil produced monthly.

As such, it means while the Guyanese parents, working on a Guyanese salary scale would have to reach into their pockets to meet the increased fee, it would not affect the parents of the expatriate workers, since the fees for those children are recouped from Guyana’s oil.

This was made even more glaring when gauging the parents in attendance, none of whom were expatriates but rather Guyanese, some of whom were senior government officials and members.

With the hike in the fees, it would mean that EEPGL and their partners, have effectively raised the fees at that private school that they know is being paid for, out of cost oil, and as such would not affect their finances.

This obtains since, under the PSA/Oil Contract the cash flow from the oil fields to the private school, it is what was agreed to, in principle.

Under the PSA, there are a number of categories of spending by the oil companies that have been identified as recoverable, without further approval from the substantive minister.

Meaning, the PSA provides for ExxonMobil Guyana and their partners to incur spending in specified areas while at the same time recouping that spending from the oil produced, and without further approval by the Minister, in this case Vickram Bharrat.

These include labour and other associated costs.

A perusal of this provision reveals that gross salaries and wages including bonuses of the employees of the parties comprising the contractor directly related in petroleum operations, irrespective of the location of such employees.

Additionally, it lists costs regarding holiday, vacation, sickness, and disability payments applicable to the salaries and wages.

It also caters for recouping the cost of established plans for employee’s life insurance, hospitalization, pensions, and other benefits or a similar nature “customarily granted to employees of the parties comprising the contractor.

Further, the contract provides that travel and personal expenses of such employees including those made for travel and relocation of the expatriate employees is also recoverable, in addition to the transportation of employees.

These among other provisions provided in the contract, cumulatively serve to allow the oil companies to use Guyana’s oil to rob the nation of its own resources.

Citing an example, it would be apposite to note that each of the vehicles purchased and used, including drivers, security, fuel and lubricants and other ancillary spending are also being used to shuttle these students to and from school, at the expense of the owners of the resource—the Guyanese people.

EEPGL and its partners and affiliates are as such, allowed to import into the country—duty free—high end luxury vehicles, all being paid for using the oil produced from the Stabroek Block.

It was raised during the meeting and proffered that what is in fact taking place is the further segregation of the country by effectively forcing the students of Guyanese parents, employed on a Guyanese salary scale, out of the school.

It was suggested during the meeting that the school was looking to subsidise any shortfalls in the payments being asked for to be met by Guyanese parents with their children at that school.

At this stage in the meeting, at least one Guyanese parent objected to the proposal calling it insulting and is akin to “spitting in the faces of the local parents.”

Additionally, the nexus was also drawn to what obtains in the domestic private schools in comparison to the affairs developing at GIA.

To this end it was pointed out that, existing domestic private schools are mandated by law to pay their taxes and other commitments, financial liabilities that are ultimately borne by the parents of the children attending those schools.

Another comparison of note would be the salary scales being paid to the expatriate teachers as against the local teachers, for doing the same job at the same school.

It was noted too that the Guyanese children would have to make their way to schools using primarily the public transportation system—minibuses—or bicycles, while those at GIA, their expenses are met using Guyana’s oil.

Another contrast of note is pellucid in the construction and state of the GIA facility versus those in the Public system and other local private schools.

Apart from 24 hours security, the school for a fully air-conditioned building complete with state-of-the-art laboratories and recreation facilities for students and staffers, even automatic taps in the lavatories.

In the coming weeks, Kaieteur News will continue with its series on how oil companies use Guyana’s resources to exploit the country further.

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• American, Georgetown International Academy (GIA), oil, resource, Stabroek Block

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