Never a word from Prof. Randolph Persaud about the lopsided contract; only groveling defenses.

Jul 17, 2023 Letters

Dear Editor,

Kaieteur News – Presidential Consultant Prof. Randolph Persaud and pro-Govt. letter writers and bloggers want Guyanese to believe Exxon is taking extraordinary risk to invest their money in Guyana to do oil extraction. In this way Guyanese must get distracted from – and not focus on the question of whether or not Guyana gets fair value for our non-renewable oil resource.

Consider these bullet points

(1) We forever read Oil Companies plunge $30 billion into Guyana. Is this $30 billion put at great risk, so that we Guyanese must literally grovel at Exxon (lead operator) for coming to our rescue? Actually, only the initial $460 million exploratory cost was real risk money. Once oil reserves of 11 billion barrels were discovered, there was no risk at all for their $30 billion invested in Guyana. Oil not discovered: their only risk/loss was the exploratory cost. There is still great demand for oil in the world today – and demand is guaranteed for the next 30-years, despite the transition to clean energy sources (wind, solar, nuclear power). The PSA was designed in such a way that every dollar invested is recovered rapidly at 75% CR, Cost Recovery rate, profit’s tax waived for life of contract, royalty at 2% scandalously low. And, in the event of a Windfall Gain like the Ukraine War (oil prices shot up to $150 a barrel), Exxon keeps the whole windfall gain. GoG, owner of the resource, is not entitled to share in the windfall gain.

(2) Our real problem in Guyana is that we have a very lopsided contract. Guyana gets a mere 14.5 barrels out of every 100. The pro-govt writers and bloggers want to brainwash us into believing we should be happy with 14.5/100 barrels.

(a) They tell us Guyana did not invest One Fat Dollar. So, be happy with what little we get. This is the stupidest, nonsensical push-back we get from govt defenders/supporters. We are not Indians from Columbus’ time who did not have a concept of value for mineral resources. Not natives from Joseph Conrad’s 19th century novel. We are a Sovereign and Independent nation with a right to demand fair value for our oil resources. And, if a former govt left us with the “shittiest contract” known to man, a Sovereign nation has the right to demand renegotiation.

(b) These bloggers argue against the Royalty comparison with Suriname (6.25%); Guyana 2%. On this low royalty compared to Suriname, Guyana loses/foregoes $33 billion on 11 billion barrels. They counter by telling us Suriname has yet to extract a single barrel, hence we should be happy with 2%. Such ignorance is unfathomable.

(c) These bloggers tell us it is ok for Exxon to keep the whole of the Windfall Gain, this way we pay out CAPEX faster, and then we get the whole of every third lift. They refuse to accept that Absence of Ring Fencing will effectively work to prevent CAPEX from being paid down, and they don’t understand the concept of Discount value of money. A billion dollars today is worth more than a billion dollars five or ten years from today.

There are dozens more of these things – trying to insult the intelligence of the Guyanese people. One wonders whether Dr. Randolph Persaud (Prof from American University) is directing the push-back propaganda operation from a desk out of the presidential secretariat. Never a word about the unfairness of the 2% royalty, or the high cost Recovery set at 75%. VP Jagdeo bemoans and intones: “You (PNC) left us the shittiest contract”. This is such an ignorant statement. Bad enough: PNC signed the contract w/o reading or negotiating. Worse: that VP Jagdeo occupies the seat of govt and chooses instead to defend the contract – rather than demanding renegotiation.

(3) One fool defending the contract compared it to a contract involving tomatoes. Tomatoes went up in price, he argues, since you signed the contract, are you nuts to come back now and demand a higher price? This distinguished fool could not differentiate between perishable tomatoes and the world’s most valuable commodity, oil. His whole idea was to offer up a defense, any defense of the oil contract.

Such ignorance the Guyanese people have put up with – all from folks trotted out by the govt to defend the oil contract.

Regards
Mike Persaud

Latest News

Never a word from Prof. Randolph Persaud about the lopsided contract; only groveling defenses.

Related

Similar Articles

The Glenn Lall Show|| April, 4th, 2025

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

‘One Guyana’ 3×3 Quest tips off today

Twin tons from Anderson, Imlach steer Eagles back...

Race for quarterfinal spots commence today at MoE...

Marsh sets up Lucknow’s comfortable win...

Saints and GTI dominate as YBG Georgetown...

Carty misses ton, Hamilton (80) sets up tense...

Features/Columnists

The One-Man Republic

The U.S. “Joining” the Commonwealth: an unreasonable expectation

Polls – what they say, where I stand

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]

Never a word from Prof. Randolph Persaud about the lopsided contract; only groveling defenses.

Share this:

Related

Similar Articles

The Glenn Lall Show|| April, 4th, 2025

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 […]