Latest update June 24th, 2026 12:40 AM
Latest News
- Guyana should fiercely guard against secrecy in oil and gas sector – Trinidadian Energy Strategist
- Opposition Leader demands thorough investigation of alleged tax and labour law breaches by GTE contractor
- U.S. Senate votes to pass Iran war powers resolution, in blow to Trump
- Opposition nominated GECOM Commissioners do not represent party interests – Alexander
- Cuban Community on edge as woman vanishes in Guyana
Oil assets
Editorial…
Kaieteur News – According to ExxonMobil’s annual report, the company and its co-venturers have invested GY$3.9T in assets in Guyana. To most Guyanese, one trillion is an out-of-the-world figure that strains the senses. But it is not one trillion, but four trillion in offshore assets. With almost GY$4T in assets here, it is the equivalent of about US$20B, another enormous sum. This is of much significance, considering the absence of an unlimited parent company guarantee from ExxonMobil, if there is a massive oil spill offshore.
According to Guyana’s Vice President Jagdeo, offshore oil assets could be used to cover expenses related to an oil spill. We hold to the side the issue of Guyana paying back ExxonMobil for its investments in the Stabroek Block, and actually owning those assets. But they have been put forward by Jagdeo as what could be sold to help defray potential labilities from an oil spill. In theory, US$20B in assets that are available for sale sounds reassuring. In reality, not one Guyanese should be comforted by that US$20B (GY$3.9T) in assets. Those billions could end up being a drop in the liability bucket, if there is a severe oil spill. But this is what Jagdeo has gambled this country’s safety and prosperity on, and which ExxonMobil talks up in its 2024 annual report. Often, we at this paper weigh if Guyana’s oil czar and the oil captains of ExxonMobil don’t put their heads together, so as to get their talking points well-aligned. Assets available for disposal in an oil spill represent one such instance.
For starters, like most if not all items purchased and taken out of the box, the stated value immediately begins to go down. As the years of use increase, those assets decline in value, so what is valued at US$20B today is not quite in the vicinity of US$20B a year from now. The ExxonMobil 2024 annual report noted the co-venturers have committed to invest another GY$5T in the Stabroek Block by 2028. Again, this may be very encouraging on paper, because the asset base is widened, through more US billions added. What should be remembered is that assets already on the books, and in operation, are subject to ongoing depreciation, with the net result being that they are losing value. As a reminder, Guyana is paying for those assets, and owns them.
Also, in the event of a catastrophic oil spill, and in a country where foreign exchange availability is often on the brink, cash could be needed on an urgent basis. This means that the billions/trillions in assets that are being bandied about would have to be liquidated into a market that has the seller over a barrel. The seller wants ready cash, the buyers have a choice, have time on their side, and have the stronger hand. In other words, Guyana could find itself in that shakiest of bargaining positions, one where it is operating in a take-it-or-leave-it environment. In such situations, information is the key, and the whole world would know of the desperate straits in which this country finds itself. To reiterate, all the power would be in the hands of the buyers of what now fall under the heading of distressed assets. In layman’s language, who would be so foolish as to be in a hurry to buy damaged goods? A vehicle that failed in a major way, and left its owner stranded and helpless? Unfortunately, it could be the scenario in which Guyana gets bogged down. To make matters worse, with vulture operators circling overhead, asset sales that may have looked rich at one time, now deteriorate to fractions on the dollar.
The point being made to citizens is that GY$3.9T in assets, or US$20B, would not be as bright as told and sold to the gullible. A cash-strapped Guyana would be a hostage to its past weaknesses, its old failures. GY$3.9T in assets are not being pushed to the forefront by accident. That’s part of the continuum from Jagdeo and ExxonMobil that Guyana is in a solid place if an oil spill occurs. The unlimited parent company guarantee from ExxonMobil is, therefore, unnecessary. Guyanese should not be that naïve, nor fall for that asset trick.
Share this:
Discover more from Kaieteur News
Subscribe to get the latest posts sent to your email.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Sir. Ronald Sanders
The GHK Lall Column
Weekend Cartoon
