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RESPONSE TO GLENN LALL’S VIDEO PODCAST “DECEPTION & CORRUPTION GETTING WORSE BY THE MINUTE IN GUYANA” 

Sep 25, 2023 Letters

DEAR EDITOR,

Kaieteur News – The PNCR has noted that Glenn Lall, publisher of Kaieteur News, devoted most of his recent podcast (“Deception & corruption getting worse by the minute in Guyana”) to criticizing the PNCR for, as he described it, remaining silent as the government approved licenses for ExxonMobil’s 3rd, 4th, 5th and 6th oil projects.

We have in fact spoken publicly on this issue several times. Indeed, we have proposed a framework under the current PSA that better serves the country with regards to the processing of new licenses. At our Opposition Press Conference on April 6, 2023, we provided the most details on our position. We started by slamming Jagdeo’s plans to fast track the oil industry for a minimum of 15 years “as reckless, wild and a recipe for massive loss and leakages of revenue.”  Instead, we called for a more measured oil depletion or extraction rate based on spacing out the development of new projects in the Stabroek Block in a manner that allows Guyana to increase its cut through higher profit oil.

We went on to elaborate: “At the moment, the 50/50 split gets Guyana only 12.5% of oil revenues – a percentage that seems unlikely to budge under the ongoing oil rush. With five FPSOs already in operation or already approved, the country is now well-positioned to seek a larger cut of the pie. In terms of numbers, the 25% profit oil must be allowed to increase so that the 50/50 split would earn Guyana more than 12.5%.”

Therefore, as we then further proposed, the government must invite Exxon to the table to work out a balance (or a sweet spot) between expenditures on new developments and revenues from current projects that will allow the  75/25% cost oil/profit oil ratio to trend towards greater profit oil… as urgently as possible.

We also remarked that “A measured pace of new oil developments will also allow the country to get its act together in terms of its institutional capacity building to monitor, evaluate, and audit operations.”

Importantly, we pointed out that a more measured oil depletion rate could be negotiated under the current PSA, with the government using as leverage (if necessary) its approval powers for new projects.

We have repeated these ideas a few times since. True, they did not come with bells and whistles. Let us hasten to add, however, that we are not advancing our resource depletion or extraction strategy as a substitute for new negotiations on royalty, ring fencing, etc. What we are saying is that the government can win more benefits for the people of Guyana under the current oil contract by leveraging its powers to grant permits and licenses.   Such leveraging was used under the APNU+AFC Coalition to strengthen the Liza environmental permits.  We believe good-faith negotiations can produce a project development schedule that increases profit oil (and hence Guyana’s take) in the near term without unduly harming the company’s profits.

We welcome a public discussion on this proposal.

Yours respectfully,
People’s National Congress Reform

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