Interest rate

Aug 11, 2024 Editorial

Kaieteur News – Guyana’s chief oil policymaker, Vice President Jagdeo is right: the question about the interest rate that ExxonMobil is charging Guyana has been asked many times before. He is dead wrong, though, when he persists with the farce that he has provided an answer about the ExxonMobil interest rate. Jagdeo knows that a non-answer is not an answer, never qualifies as one.

The record is of Guyana’s chief oil representative, one given (or who has given himself) plenipotentiary oil powers, running away from giving a clean, straight answer on this most crucial of questions: what is the interest rate ExxonMobil is charging Guyana?

To give Guyanese an interest rate number should not amount to such a difficult development, which triggers repeated confrontations from oil czar Jagdeo. Resistance to coming clean with something as basic as the interest rate being charged and paid signifies that there is some level of darkness, if not danger, in Jagdeo sharing it.

There is no competitive disadvantage for ExxonMobil, Guyana’s partner in its growing and soaring offshore oil sector. The American oil giant rules the roost in Guyana, virtually enjoys unchallengeable power in doing whatever fulfills the visions of its board of directors and top executives.

In other words, no other oil company could come here and remove the stranglehold that ExxonMobil has over the PPP/C Government, Guyana’s oil wealth and, it could be said to a considerable extent, the people of Guyana. A concern that balloons into a problem, a serious one, could be present in both ExxonMobil and Jagdeo if the interest rate charged makes both look less than straightforward. It could be the explanation for this mystery and this fierce objection from Jagdeo (and with ExxonMobil spurring him on from behind the scenes) over making known the interest rate charged.

Interest rate scenario one follows this outline. If ExxonMobil was charging Guyana an interest rate close to what other major oil companies are charging host countries, then it would have given free rein to Jagdeo to speak loudly about that rate. When such an interest rate is charged by ExxonMobil, then publicizing it confirms how much of a trusted and valuable partner the company is to this young, oil-producing country. It would be a seasoned veteran in the oil business showing the new kid on the oil block (Guyana) how the business works, while giving it a boost every step of the way. A fair and favourable interest rate would be the evidence, and it is something not to be kept secret.

If, however, what ExxonMobil is doing is charging an arm and a leg for an interest rate on the US billions it invests here, then that is something to be hidden away, as if the life of both Jagdeo and ExxonMobil depend on it. A reasonable position is that ExxonMobil is probably charging Guyana a loan sharking interest rate, in which case secrecy about that interest rate becomes very prized. Naturally, this leaves Guyana’s chief oil representative in a muddle.

His back is against the wall, and the only escape he has is the speciousness of that ‘question has been asked a million times’ and that it ‘has been answered’ on each occasion. After having the dubious pleasure of dealing with Jagdeo for over two decades, we, at this publication, have come to appreciate that Jagdeo has his own interpretations for what certain words in the English language mean or should mean. It is his way of twisting and packaging things, most of them farcical, or loaded with unknowns. Using this Jagdeo standard as the measuring rod, when he says that he has answered repeated questions about interest rates, then his idea of answering is part of his camouflage, so deficient it is.

Answering an interest rate question without a number has no merit, nothing to recommend it. A numberless interest rate is not just half-baked, it is what makes half-wits of Guyanese, because it does not inform or enlighten in any manner. Guyanese, the owners of a massive oil patrimony, are misinformed, misled, and mistaken for fools. Jagdeo himself knows that the interest rate charged by an oil partner should not be such a hernia, cause him such constipation.

chief oil policymaker, ExxonMobil, Guyana, qualifies, Vice President Jagdeo

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