ExxonMobil’s huge cost recovery; Guyana’s tiny profitability

Jan 31, 2024 Editorial

Kaieteur News – The numbers are as far apart as can be imagined. No complicated calculations are needed, for there it is as plain as day and plumb on the nose. Guyana is hurting from the imbalance, ExxonMobil is celebrating the good, if not great year that 2024 is shaping up to be. The company’s investment in the fourth oil project here is on track to be fully recovered one year ahead before the project is scheduled to come onstream. No ring-fencing is a bonanza for the coffers of ExxonMobil. On the other hand, no ring-fencing is an influenza and also diarrhoea for Guyana: US$12.6 billion to be recovered this year for the Payara project. We can hear the glasses clinking and imagine the celebratory high fives in Texas. Still, no ring-fencing remains the mantra of the man in charge of the trillion-dollar oil sector.

All things steady, ExxonMobil is standing pretty. When a company can recover its total multibillion-dollar investment in a project in such rapid time, then it has everything going for it. A government and its leaders on its side, selling its exploits, suppressing people who object, and continuing with the provisions that enrich ExxonMobil and its partners. The executives of ExxonMobil are positioned to spread joy before their board of directors, and ensure that their shareholders prosper. The irony is that Guyana’s oil superstar, Vice President Jagdeo, is the biggest backer, the loudest cheerleader for ExxonMobil, makes possible the opulent conditions under which the company operates here.

Insist and persist with calls to ring-fence the projects, contain the expenses, segregate those same billion-dollar expenses to individual projects, and ExxonMobil’s most important partner, Jagdeo, either goes into a frenzy, or he transforms into the unrecognizable. According to Jagdeo, if the oil projects are ringfenced, investors will balk, be overcome by second thoughts. If and when they do, then those are the types of investors that Guyana should not want here, who do not belong here. Not to ring-fence opens the door for all manner of skullduggeries. Give a company or a savvy individual the opportunity to experiment with huge expenses and carry them over to other projects is an invitation that will be grabbed on each occasion that it is available. There will be no shortage of takers, and this should explain why ExxonMobil’s Country Head, Mr. Alistair Routledge, engages in all kinds of novel dances to rationalize no ring-fencing.

Why should he cooperate in cutting off the nose, if not more, of his company? Why should he be a participant in what would take away a good thing, probably the best thing, from his company in the Guyana oil partnership? The fact that ExxonMobil is fighting so hard, not giving an inch on ring-fencing, should be enough to persuade all Guyanese that there is so much that is involved in the projects being without ring-fencing. For sure, it means that much to ExxonMobil, is that enriching to this calculating and clever corporate entity. It is also that haemorrhaging to the prosperity of the Guyanese people. This is what Guyana’s chief policymaker on everything, most of all oil, stands for immovably. He lives to jump to ExxonMobil’s every wish, its every command.

We invite citizens to examine closely the policies of Jagdeo. How much ExxonMobil comes out on top all the time, and how much Guyana is ground into the dust every time. What Jagdeo is doing is not policymaking, it is working (in the most deplorable meaning of the word) with ExxonMobil and its trickiness, to the detriment of every citizen of this country. Listen to the Vice President, and all that is heard are excuses, and how often he goes into a defensive mode. Press him to ring-fence the oil projects, and he is more concerned about nervous foreign investors. Guyana’s oil is high-quality, and it is cheap, but those two elements are of little value to investors. The lack of ring-fencing is, and this is what the Vice President devotes his energies and his mind to deliver. He knows fully well the benefits that would accrue to Guyana with ring-fencing, but is helpless to do anything about it, or trapped by his own rhetoric, and under the complete control of ExxonMobil.

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Editorial, ExxonMobil, Guyana, profitability, recovery

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