Jagdeo boasts of paltry increase for elderly and schoolchildren – Glenn  Lall

Sep 04, 2023 News

---

…refuses to address ring-fencing to rake in US-billions for Guyanese

Kaieteur News- While the Vice President is busy boasting about a $7,000 and $10,000 increase to old age pension and the school children cash grant respectively, by 2025, he is refusing to address the nation on a critical aspect of oil production that has been shortening the country’s share of profits generated at the resource rich Stabroek Block.

This was highlighted in a public comment by businessman and Publisher of Kaieteur News, Glenn Lall. Lall, a stern advocate for a fair oil contract, who recently said that ring-fencing is a key element required to ensure Guyanese benefits from their wealth discovered in the Stabroek Block.

A ring-fencing provision would prevent oil companies from using revenue generated from a production field to offset costs in another project. In the absence of such a provision, ExxonMobil have been using the proceeds from the Liza One and Liza Two projects, currently producing about 400,000 barrels of oil per day, to pay for costs related to other Stabroek Block projects.

For instance, it was reported that in 2022, ExxonMobil and partners, Hess and CNOOC deducted, costs to clean up (decommission) the third and fourth projects that are yet to commence oil production.

The provisions of the Stabroek Block contract signed between the government and the oil companies allow for 75 percent of the monthly revenue to go towards cost recovery or repaying the investment. Presently, Guyana merely benefits from 12.5 percent of the profits and an additional two percent royalty. The country’s take is significantly smaller compared to the revenue being earned by the oil companies. Only yesterday, it was reported that US$1 billion in costs were recovered by Exxon in the first three months of 2023 while Guyana barely received US$219 million during the same period.

Guyana’s profits will remain meager unless a ring-fencing provision is instituted to prevent the oil companies from transferring the revenue in an operating field to develop the resources at other projects.

Consequently, the Publisher of Kaieteur News has called out the Vice President for failing to plug such a dangerous loophole, all while bragging to Guyanese about insignificant increases to the schoolchildren grant and monthly old age pension.

Lall reasoned, “Man, if your neighbour chickens coming over your yard, eating out all your chicken feed every day, denting your pocket while fulling his own, wouldn’t you fence your yard to stop that or yuh gon turn a blind eye to that?”

The Newspaper Publisher pointed out that the former Minister of Natural Resources Raphael Trotman approved two projects but did not include a ring-fencing provision.

This, he explained, created the condition for Exxon to “eat” at Guyana’s profits as much as it would prefer.

The former Leader of the Opposition, Bharrat Jagdeo just over three years ago expressed his frustration over the then A Partnership for National Unity + Alliance For Ch

ange () Coalition’s failure to include a ring-fencing provision.

At that time, Jagdeo assured that when the People’s Progressive Party Civic (PPP/C) returned to office, this would be a priority when the contract is renegotiated.

“They sold us out to the foreigners. The oil companies, every time there is a find out there, our people should be sad because nothing comes our way. We are gonna renegotiate those contracts because that’s not what we had in mind,” Jagdeo said.

He added, “When we were in the early days, we were coaxing the people (ExxonMobil) to go along. They (Coalition) came into office – three billion barrels of proven reserves and they gave up zero royalties, no taxes, no ring-fencing.”

Soon after taking office in 2020, the now Vice President (VP) has not only changed his tune but also his tone when it comes to the renegotiation of the Exxon contract and securing greater benefits for Guyanese, through ring-fencing or more royalties.

 

During his press conference on Thursday, this publication asked the VP whether Guyanese can look forward to any additional fiscal benefits from the sixth oil project and if government will ring-fence any future projects in the Stabroek Block, given the unusual size of the offshore acreage.

To this end, the VP responded, “Asked and answered a hundred times before, 100 times before. I am not gonna go through this again.”

Lall in this regard has chastised the former Opposition Leader for failing to ring-fence any of the Stabroek Block projects, despite lashing out against the then Coalition government for not including a ring-fencing provision.

The newspaper Publisher argued, “He went and approve three oil projects without that same fence; he cussed the PNC about.   He is going to approve the sixth oil project year end if the Guyanese people allow him to, and when my reporter asked him last week if he will put that fence to stop Exxon from eating out US billions of our oil that will shorten our profits, he is saying asked and answered 100 times.”

The advocate contended that such an “arrogant” response is unacceptable from a leader in charge of the petroleum industry.

 

Lall believes that the response is akin to the Vice President telling “all of us to go to hell. No taxes, same royalty and no ring fencing on any other oil projects granted to Exxon.” In the meantime, he argued that Guyanese are supposed to accept the $7,000 increase in old age pension and $10,000 increase in schoolchildren cash grant come 2025.

 

---

• APNU+AFC, Bharrat Jagdeo, boast, cash, Glenn Lall, grant, Lall, ring-fence, Stabroek Block

---