When insurance is not really insurance, gives little reassurance

May 26, 2024 Features / Columnists, The GHK Lall Column

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Hard Truths by GHK Lall

Kaieteur News – A homeowner or business person sees the flicker of an errant spark and there may be a pause, or a shrug.  They see or smell smoke, whiffs first, then billowing clouds, and anxieties flare, alarms go off.  How much can be rescued from a broadening conflagration, how much recovered in the instance of total loss to start over.  In distressing times, the human instinct for self-preservation and continuity takes over.  Is the coverage enough?  Will the insurance people payout?  Are they capable of paying up?  What are the consequences of any dispute, prolonged legal tussle?  As relevant to home and commercial property, the same applies to oil.  All those suddenly worrying, frightening questions.  They said the Titanic couldn’t sink; it still shares a dismal watery grave with Neptune in the desolate Atlantic.

In his inimitable way, Mr. Chris Ram, a rare Guyanese character of numbers and words, did the donkey work and delivered the freight.  It is weighty.  A maximum of US$2 billion from the three-member Exxon-led offshore consortium.  Thank God for America.  And Exxon, of course.  So thoughtful, helpful.  So much like a good partner, a wonderful neighbor.  Two billion US green is a bundle of money for a Guyana with, what, a sparse 800,000 people.  I urge the well-tutored amongst us to multiply US$2 billion (9 zeros) by 200 to get the equivalent in Guyana dollars.  When the zeros are totted up, the result is GY$400,000,000,000.  Like I said, plenty for a plenty rich country with plenty of poor people.  If there is a little oil leak (not spill or drenching), it’s a tree falling in the middle of the jungle.  An unknown, uneventful, uninspiring, development.  Business as usual, carrying merrily along.  The concern is when a small leak increases to a slow drip which intensifies into a big, rushing gusher of a (I have to say it) blowout.  Suddenly, Chris Ram looks like the wisest man in Christendom, which he isn’t.  In Guyana, maybe, but let’s leave that other realm free of his reach.

Like the homeowner and business owner growing increasingly fearful, those earlier questions deepen.  I reword.  Can this insurance group called Jamestown in Bermuda step up, is it good for its share of the coverage?  It was rated A (Excellent) by AM Best, a top-of-the-line presence in the rating business.  Financial strength, Guyanese are assured, comforted.  But, if there are any locals who are familiar with insurance companies enthusiastically stepping forward and shelling out, please correct me.  If insurance companies could squabble and quibble over a million Guyana dollars, I shrink from thinking of the reaction for a half billion American ones, or 100 billion Guyana.  Many Guyanese have concluded that I am crazy which is a blow borne smilingly.  But who is the crazier crackpot now, when there were all those risks that were ignored, all those safety limits routinely violated, all those sensible precautions dismissed?  Are Exxon and its partners still making speeches?  Is Big Boss Bharrat still blubbering what he usually blubbers?  Are Guyanese parliamentarians, especially the court prone Attorney General still filibustering about probabilities and what is highly unlikely in brilliant imitation of a remarkable American oil gentleman by the name of Alistair Routledge?  For the edification of all, American oil gentleman is not an oxymoron.

The reality is that a severe spill in the seas doesn’t have to be Macondo in the Gulf of Mexico.  A rupture of 10% magnitude still could inflict damage over Mr. Ram’s US$15 billion note for a routine one.  We have the sum of US$2 billion, God forbid, should a pipeline yield to the astronomical pressures down below.  Guyana is not Australia, but in such a circumstance, Guyanese may wish they were at the bottom over there.  I am not talking about an oil slick, but of a ton of bricks landing on each Guyanese head.  Why everyone, the inquiring may be so presumptuous to ask?  Ask away, my name is Lall, not Jagdeo.  The real deal versus a real farce.  Because if an oil spill is catastrophic enough, the entire country will be severely dislocated.  Economics and earnings.  A small patch of the environment only, let’s hope.  I prefer prayer.  Now divide GT$400,000,000,000 (400 billion) by 800,000 and check the result.  Cancel out five zeros from the top and the bottom, and it’s GY$500,000 per citizen.  Whatever the size of the family that is no money.  In sum, when mopping up of the environment (local only) is a priority, Exxon and Jagdeo would have positioned themselves well to mop up the floor with the faces and future of every Guyanese.

For those thinking of the non-oil sector, I ask where is it and what about it, compadres?  I conclude: just as how Mistah Alistair Routledge and Daktah Bhar-rat Jagdeo thrill to tell locals of the cascade of oil revenues to come, this also works the other way.  If there is a big, badass, oil spill, the cascade of calamities can and will be constricting and strangling.  A cleanup exercise of months would wipe out that GY$500,000 per person.  Then what?  There is no oil money.  No bright lights.  No foreign love.  Only some neighbors in the region looking to chop off the head of any Guyanese they encounter. Exxon drew the line: US$2 billion.  Jagdeo kissed it.  May there be no reason to curse it.

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