Everybody cashing in, why not Guyanese?

Nov 01, 2023 Editorial

Kaieteur News – Wise business leaders in the global oil sector are already on the move, with not a second wasted. This is what came out of Wall Street Journal under the caption “The offshore oil business is gushing again” (January 21). It is by how much, and in how short a span of time. The numbers are revealing, with much meaning for Guyana, now in the thick of the oil-producing world.

There was a downturn in the oil business in 2014 due to its boom-and-bust nature. High shale oil production and OPEC’s resistance to reducing production levels led to oversupply and falling prices. Additionally, many corporate oil players had overextended themselves in the boom years, which is also a regular feature of a volatile commodity and sector. According to the Journal, in 2107, the worldwide fleet of offshore drilling ships was operating at about 63% of total capacity. By December 2022, that had climbed to approximately 90%, due to booming business. Robert Eifler, the Chief Executive Officer of Noble Corp said that “after eight years, we basically have full utilization of the high-end drill ship fleet.” Full utilization is reason for gushing, grounds for oil CEOs to celebrate their turn of fortune.

There are about 600 drill ships globally, and around a third of those that are in working condition are concentrated in the waters of Brazil, Suriname, and Guyana. Guyanese should note how the drill ship companies raised the prices for leasing their vessels now back in a heavy demand environment. The price to lease a drill ship was less than US$200,000 two years ago. It then increased by 50% to US$300,00 early in 2022, and another 50% (100% altogether) to US$400,000 in recent times. The forecast of industry analysts is for US$500,000 per ship by next year. So, in three short years, the price being charged by drill ship companies is set to increase by a total of 150% from where it was in 2020. In short, drill ship companies and their CEOs are cashing in while the new boom is in swing, and the going is good.

This is the oil environment and business climate in which oil-producing Guyana finds itself. The opportunities could not be more favourable, for the information coming out of Hess Corporation is that it is putting 80% of its budget in two places: the US and Guyana. With such a concentration of funds, there is an opening for us, especially since ExxonMobil is not lagging in its own investment contributions to its Guyana oil portfolio. Now the same John Hess has just cashed in on his selling of his company’s Guyana partnership interest to Chevron. A company in the doghouse is now in the penthouse, thanks to Mr. Hess’s slick moves that generate a bonanza for his shareholders and himself.

Shipbuilders, ship owners, shareholders, and sharp corporate salesmen are all cashing in on Guyana’s treasure that is reaped, even looted. Yet, the PPP/C Government is stuck in two unmoving positions: the APNU+AFC is continually blamed for tying Guyana’s hands with ExxonMobil; and leaders have manifested a marked preference for sitting on their hands and hiding under sanctity of contract.

Meanwhile, more is being charged for oil products, drill ship operators are charging more for their vessels, and oil companies are enjoying more profits. Look how John Hess cut his own card, rewarded himself with trumps. In this enriching environment, government and leaders are happy to sit still, keep their lips sealed, and take whatever Guyana gets. To present differently, the same PPP/C Government, both when it was in the opposition and on its return to power, denounced in the worst terms the vile ExxonMobil contract, only for its leaders now to resist fiercely any calls, any moves, for its renegotiation, so that Guyana can get more money in royalties, taxes, and through ringfencing.

Corporate leaders are charging ahead to cash in by charging more for their boats and services, while Guyana Government leaders are downing their heads, downing tools, and down and out where getting more (charging) for our oil is concerned. No government, no leader, no political opposition, no society can be this slack, this bankrupt in courage and simple business wisdom.

cashing, Editorial, Guyanese, OPEC’s, world

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