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Extract and leave
Editorial…
(Kaieteur News) – Neither the vision nor the objective, not intended to be the practice. It is not to extract and leave. It is to build Guyana. That is very pleasing to hear from anyone. It rings more inspiringly coming from the U.S. Ambassador to Guyana, Nicole Theriot. The ambassador was celebrating the 250th anniversary of Independence for her country by reassuring all who would listen in this country. “U.S. companies are not just here to extract and leave like some other countries.”
It seems that Ambassador Theriot is a student with her own logic, one who is more at home with contradiction. For one, U.S. oil giant, ExxonMobil, would be foolish to leave. Its extraction rate is spiraling, with no end to spiraling oil production decades into the future. Which company, American or other, would leave under such circumstances? Would ExxonMobil leave after a mere six years of exploitation of Guyana’s rich oil fields with another 40 years, at a minimum, of premium oil production to go? We at this paper have a duty to remind the ambassador of these inconvenient truths. A duty that becomes more pronounced with Chevron, another U.S. oil giant, now part of the great oil boom in Guyana. The company spent US$53B to get its foot into the rich acreage of Guyana’s Stabroek Block. It follows, therefore, that its presence, like that of ExxonMobil, is guaranteed to continue for decades to come. Hawklike Venezuelans, should they surface, could not get the Americans away from Guyana’s big gusher, the Stabroek Block.
The beginning and end of this is that no American company is going anywhere, when the profit landscape is so highly enriching. The oil is plentiful, it is rich in quality, and it is cheap. There is a compliant government, to put it politely. The regulatory environment is friendlier than a puppy. The corporate income tax regime for oil operators is virtually zero. Which company, oil or nonoil, leaves all of that behind? The contract that applies to operations in the Stabroek Block covers approximately 26,806 square kilometers. This is an exploration area that over 50 countries cannot boast of having that kind of space. Though ExxonMobil and its partners have been busy mapping, studying, and exploring, there is still so much more undersea space to cover. There is a treasure trove of unbounded opportunities inspiring additional future efforts. Which company will not want to explore to the maximum, given the decades of freedom provided for in the 2016 Production Sharing Agreement? There are many other companies who dream of getting near to a slice of the Stabroek Block. With American companies well-established there, there is no reason at all, why they should leave any of that behind. Would not make business sense, fly in the face of basic reasoning.
We recognise that Ambassador Theriot has her role to fulfill, and she does it well. Push for opportunities for American businesses, then put up a strong defense for them. When they fail to build and deliver, as in the instance of the Wales Gas-to-Energy project, it is the ambassador’s job to be watchful for them to get a fair hearing. Also, we understand the ambassador nuanced dig at non-U.S companies (“like some other countries” companies). It was intended to highlight the contrast that she was setting up to sell her own country’s companies. In effect, American companies are here to stay for the long run.
The ExxonMobil consortium has got it so good that it is staying firmly grounded here. The significance of that is American Airlines sees Guyana as a viable commercial destination. Schlumberger and an army of supporting service companies, many of them American, but with lower profiles, flock here to explore profit opportunities. To build their franchises, and expand their shareholder value. Guyana is like a placid cow. It is open for business, waiting patiently to be milked. The PPP/C Government is so investor-oriented that it would give away the milk for little to nothing. The fact is that the Guyana oil cow is no longer under the control of this country. The mantra is extract, extract, extract. Nobody is leaving that behind, considering there is a giveaway that comes with a free hand.
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