Now drill ship rates going up, what about Guyanese?

Jun 21, 2023 Editorial

Kaieteur News – The newest price rise on the horizon involves drill ships operating in Guyana’s offshore oilfields. There are four of these drill ships, aka rigs, which operate offshore under a contract with ExxonMobil. According to a recent authoritative report, the forecast is for the daily rates of these rigs to increase by 20%. Guyana must now prepare for that increased expense to be deducted before its share of oil profit is calculated.

The increase in rates is driven by rising demand for these rigs, and a 20% increase is a sizable amount. It will take some time for new rig construction to materialize, and reserve capacity is close to the limit, with demand returning to pre-Covid levels. The 20% increase around the corner, as early as before the end of the year, will result in at least GY$16 billion more being taken out as expenses by ExxonMobil, lowering our share of profits. We arrive at that GY$16 billion amount by taking the 4 drill ships/rigs currently in operation and multiplying the projected GY$16 million increase per ship per day, which gives GY$64 million more in expenses per day, and then multiplying that by 250 working days provides a final figure of GY$16 billion. This conservative approach may be wrong because ExxonMobil has been ramping up production. It does not pay to have these expensive rigs idling on weekends, for that could slowdown operations. In the event that the rigs are being employed around the clock, then the chunk of expenses for these rigs would be just over GY$23 billion (US$115 million). This is no skin off ExxonMobil’s teeth, since Guyana is paying for these rigs.

The first area of interest is what else is in store for Guyana through increased rates due to new oil market conditions. The second is what does that translate to for a final number that comes out as total expenses. The third is that oil prices have to stay close to current levels, so that this country could continue to receive deposits into the Natural Resource Fund, that are similar to what it has collected in recent quarters. There is still another concern, which has been a constant refrain from this publication.

Everything is going up, and Guyana’s poor struggle more. Prices on almost every essential household item have gone up, and continue to go up, with foodstuff prices leading the way. For emphasis, we are speaking of necessities, and not luxuries; what is needed and not what is wanted. The automatic conclusion of many would be that Guyanese are on top of the world since every calculation by every expert identifies them as the richest people (per capita) in the world. The reality is that there is a vast difference between what jumps out from paper calculations versus what Guyanese live with, and how they are forced to cope.

The painful truth is that Guyanese are hurting badly, with many unable to manage with daily bread and butter demands. In the richest society in the world, it is a struggle to feed families, and three meals a day is out of the question for many of them. Various reports from prestigious international agencies have furnished evidence of this tough state of living for Guyanese poor. Prices are going up and up, and running more and more away from them, and they are on their own. Oil rig prices are scheduled to be jacked up, and other suppliers of ExxonMobil will most likely have to follow suit, so that they do not lose from being involved in operations in Guyana.

The ones that are held hostage in this time of great wealth are its owners, the poorer class of Guyanese. For sure, the sitting PPPC Government has extended some help (cash grants, and fuel and energy subsidies, among others), but the total relief package still leaves citizens struggling to make ends meet. For the richest people in the world, this is a most wretched existence. The government would be better positioned to deliver more to Guyanese, give them tangible relief, if only it would steel itself to renegotiate the ExxonMobil contract. Both the government and ExxonMobil should remember that a hungry man is an angry man.

demand, Editorial, ExxonMobil, Guyanese, ship

Latest News

Now drill ship rates going up, what about Guyanese?

Related

Similar Articles

The Glenn Lall Show | November, 15th, 2024

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Glasgow sets new scoring record as Golden Jaguars settle Barbados 4-1

Delroy Tyrrell’s fight to swim for Guyana...

V&V Distributors joins the cast of sponsors...

Caesar and company helps Jags’ roar to finals...

RHTYSC Cricket teams preparing for 34th...

Guyana Badminton team delivers strong...

Features/Columnists

Where is the talent in the PPP?

Rising Gun Crimes in the Caribbean: Urgent Action required by all

Concerned about the president

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]

Now drill ship rates going up, what about Guyanese?

Share this:

Related

Similar Articles

The Glenn Lall Show | November, 15th, 2024

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Features/Columnists

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]