Proud to support FDI in Guyana, including from Exxon

Aug 11, 2023 Letters

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Dear Editor,

Please allow me to respond to two letters that appeared in the media on August 7, 2023. The piece by Mike Persaud is predictably pretentious. Mike thinks that a couple of references to Steve Coll’s 2012 book – “Private Empire” would burnish his otherwise vacuous claims about Exxon in Guyana. Much is made about what Col had to say about Chad, namely that the country has no sovereignty. Well Mike is unaware that Exxon sold its oil interests in Chad and neighbouring Cameroon. Savannah Energy (UK) purchased Exxon’s 40% interest in the Doba oil project, as well as a 1081 km pipeline that takes the crude oil from land-locked Chad through Cameroon. After the deal was struck, Chad nationalized the oil assets, preventing Savannah Energy from proceeding with further development of Doba. Mike should know by Guyana’s experience that nationalization is an extreme form of exercising national sovereignty. Chad now has plenty sovereignty, but they are in an economic, political, and security mess.

What Mike does not know is that since Exxon’s exit, Chad has been thrown into a worse economic situation than it had been in before. When Exxon embarked on the Doba project, which began a little over two decades ago, Chad was expected to produce 225,000 bpd. Because of intense nationalism both from General Idriss Déby (a dictator), and so-called civil society groups, Shell and Total withdrew from Chad. In 1999, a new structure was formed among Exxon, Chevron, and Petronas (the latter being a Malaysian energy consortium). President Déby (following advice like that provided by (OGGN regarding Guyana), chased away Chevron and Petronas. That left Exxon alone, which in turn also decided to bolt due to OGGN type advice exercised by General Déby. (General Idriss Déby dies in 2021, and his son Mahamat, also a General, took over).

Here is what the World Bank has to say of the situation – “Oil revenues have been volatile and downward trending, declining from 16% of GDP in 2012 to 3% in 2016. At 9% of GDP in 2021, it remains low and constrains Chad’s fiscal space, leading to a decline in capital expenditure, slow economic growth, and recessions. Therefore, bold actions are needed to reverse this course and to spur economic growth” (IBRD).

The Chadian economy declined by 1.2% in 2021 but bounced back in 2022 mostly due to oil. “The high revenue from the oil sector resulted in a fiscal surplus of 4.5 % of GDP in 2022, while the non-oil fiscal deficit was at 7.4 % (C.N. Temgoua & A. Savadogo, 7/10/2023). But now, the oil is gone due to Exxon’s divestment, and the President Mahamat Déby’s nationalization efforts. Would Cde. Mike and Cde. Girdhari, please inform the people of Chad where to find foreign investments, or otherwise offer any advice on domestic capital formation?

Cde. Girdhari deposit in the press is shallow and elliptical, as is expected. He thinks that by using Cheddi Jagan’s name, he will automatically have an alibi. But Jagan, who at one time was a hard-line champion against international capital, himself modified his perspective when he became president in 1992. Jagan was a pragmatic socialist in his later years. This is unlike Gary Girdhari who is an unreconstructed 1970s ideologue who thinks that foreign investments are automatically instances of “imperialism.”

Gary Girdhari has made numerous personal attacks against me including in the Guyana media on August 6, 2023. I hope my response will be printed so that Mr. Girdhari gets it. The man frames me as a “professed scholar…,” which implies that I misrepresent my status. Here is some data for Gary Girdhari. You can check Google Scholar where you will see I have dozens of publications in some of the top academic journals and presses in the world. Academia.edu reports that over the past twelve months alone, scholars from 91 countries, 543 cities, and 359 universities have downloaded my work 787 times. More than 1500 pages have been downloaded. Girdhari wants to know if my “…coffers [are] overflowing.” Yes, that is his critique of my defence of FDI in Guyana. Don’t you have any shame Sir?

Let me be direct about Exxon, Hess, CNOOC, and other companies like Omai, the latter being in the mining sector. FDI is vital to the upliftment of the standard of living in Guyana. FDI alone, however, cannot do the job. It must be accompanied by a solid understanding of the needs of our people, the opportunities and constraints in international markets, the prevailing trends in the multilateral institutions, and the general dynamics of the states’ system. I am certain that the PPP/C administration under President Ali is leading us in the right direction. In the meantime, Mike and Gary can continue to live in a city that is among the worst polluters in all human history.

Sincerely,

Dr. Randolph Persaud

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• Doba oil, Dr. Randolph Persaud, Exxon, Mike Persaud, Savannah Energy (UK)

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