Opposition and sixth oil project

Sep 10, 2023 Editorial

Kaieteur News – It is heartening to hear the Opposition having something of substance to say about this country’s oil wealth. Though the preference is for the leading PNCR Opposition to make its position clear on the whole oil wealth picture, there is still a nod of approval if its decision is to do so on a project-by-project basis. On the pending sixth oil project, the Opposition PNCR has come out and made its position clear: let there be ring-fencing, and more royalty, and the provisions of the new Production Sharing Agreement (PSA) must apply.

Those have been among the things we have been calling for, pushing ahead with, over the last few months. It seems that there is hardly a pause before ExxonMobil races from one oil project to another, and dragging Guyana along for the ride, whether this country agrees with it or not. More accurately, the American supergiant drags Vice President Bharrat Jagdeo along, who then drags along this captive country to sate the appetites and addictions of ExxonMobil for cheap, high-quality Guyanese oil.

Ring-fencing has been on our lips for years now, and the volume is turned up again for this sixth project. The Government of Guyana (Jagdeo) does not want to hear the first word about ring-fencing though its leaders are fully aware of the benefits to this country. Ring-fencing is all tied up in expenses for the projects that are in motion offshore. Are the expenses presented by ExxonMobil from the projects of this country? That is the first test that must be probed for, to determine what kind of partner ExxonMobil is. If expenses are from Guyana’s oil projects, then which one? What is the accounting, and the depth of the scrutiny, for the expenses of each project? This is to figure out to our satisfaction that within a project itself, the bills that ExxonMobil submit to this country for payment are valid and pass muster. Then, the next points are, how much is being presented, and how much is left to be transferred to another project already started?

Any reasonable person absorbing all this should be able to see clearly and quickly how a company possessing the financial sophistication of ExxonMobil could make rings around us, ring-fencing or no ring-fencing. Without ring-fencing, Guyana is nothing but a sitting duck and subject to any kind of financial trickery and caprice that ExxonMobil is capable of drumming up and dropping on our heads. In the presence of ring-fencing, at least there are the first layers of protection in place, so that we can focus on what belongs where, and on the accuracy and relevance of the US billions that ExxonMobil submits like clockwork for payment. The bottom line is that Guyana gives itself a chance to manage the possible expense predations of a company like ExxonMobil.

Regarding royalties, each time that the word comes up, which means that the 2% has to be mentioned, a mist of red comes out of nowhere and hovers, and blazing anger takes over. This royalty amount is a crime all by itself, and though 10% is not where we are, as embedded in the new PSA, it will be acceptable. On this one, therefore, we are as one with the Opposition. It is a fair starting point, not necessarily the overall fairness that is sought from the ExxonMobil-Guyana relationship. Of the other terms and conditions in the new PSA, they must all apply, including the expense ratios and the rest. Given the billions that have been wrested away (cheated) from this country in lost taxes to ExxonMobil’s benefit, the 10% provision in the new PSA is a small beginning, but it will have to work for now.

But of all these provisions, and outside of the environmental and livelihood security aspects, ring-fencing is the granddaddy of the hauls that ExxonMobil arranged for itself by ensuring that there was no clause for it in the 2016 oil contract. This is but one confirmation of how slick and savvy the people at ExxonMobil are. They think of everything, and they look for every area in which they can gain the upper hand on a poor country, and throttle the life out of it.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Bharrat Jagdeo, Editorial, opposition, PNCR, Vice President

Latest News