ExxonMobil has a blank cheque

Apr 02, 2023 Editorial

Kaieteur News – A man has a credit card that belongs to someone else, who foolishly gives him free rein to use as he pleases, then huge debts will be run up. After all, he does not have to pay back either the principal or the interest. Give a man a blank cheque and it is just a matter of time before he drives the giver into poverty, full bankruptcy. This is the story of the relationship between Guyana and ExxonMobil, with this country as foolish giver, and the company as grabbing receiver. Considering only one aspect of this giving and receiving, and it is obvious that this country is digging a big hole for itself, allowing ExxonMobil to bury the Guyanese people.

ExxonMobil plans projects, calculates its expenses, borrows by the billions, and then spends offshore Guyana. At least, that is what it says on paper, and in the bills submitted to us for payment. We are not sure that some of those expenses belong to Guyana, or accurate in the charges laid before us. Regardless, ExxonMobil borrows billions from lending institutions, and Guyana owes those debts. The lending institutions make their profits by charging companies like ExxonMobil interest on the loans given. Guyana has to pay also for whatever interest ExxonMobil is charged by lenders. The concern is that the interest that ExxonMobil is being charged is a secret to us.

Also, the interest that ExxonMobil charges this country is another secret, leading to secrecy upon secrecy, and this is on something for which we are paying. It is a longstanding practice for companies to tack on their own piece of interest on what lending institutions charge them. As it stands, ExxonMobil could have positioned itself well to make money for itself from our debt. If the project expenses are said to be in this amount (including any inflated expenses), then that amount of money has to be borrowed. ExxonMobil may be gouging us there, and ripping pounds of flesh from us. The bigger the billions borrowed, the more the total amount of interest that has to be paid. Guyana is paying that sum. And whatever ExxonMobil could be putting on top of the interest that it is being charged, that is also ours to pay. Is Guyana getting robbed, or what?

The PPPC Government does not want to know that, and Vice President Jagdeo does not care about what is going on with the true interest rate, how much ExxonMobil could be sticking to us. This is his public posture, what he makes no effort to share with the Guyanese public, the people paying for all the billions in borrowings, all these interest charges (legitimate or puffed up), and all of which depletes our already meager share of oil profits still more. There are these schemes, these robberies, and they could be in the hundreds of millions annually, and adding up to billions in the years to come.

For each billion dollars borrowed, it is US$100M in interest alone annually when the interest rate is 10%, without any compounding. ExxonMobil decides to be generous and puts in only 3% for itself, either in that 10% or above it, and that is US$30M annually free and clear for the company, without breaking a sweat. Now multiply that by the tens of billions that have been borrowed for ExxonMobil’s Guyana operations, and that is easily more than US$250M in pure profit a year. A quarter of a billion robbery in American dollars, and Guyana is going along with this piracy, with government leaders hurling abuse at citizens who say do something, find out, inform Guyanese, put the brakes on the company.

It is obvious that ExxonMobil is perched prettily, and not even Guyana’s Minister overseeing the oil sector has to be consulted by ExxonMobil on things like interest charged, and interest to be paid. Give a man a blank cheque, a signed one, and he will drain of every dollar, drive into madness. Guyanese are struggling, and the PPPC Government is giving ExxonMobil a blank cheque. This is not a country; it is a crime corner. The PPPC Government is not a government, it is an apology for one, a global embarrassment.

blank, cheque, ExxonMobil, Guyanese, institutions

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ExxonMobil has a blank cheque

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