The full Global Witness report has now been published. Does anybody still take seriously the estimate of US$168 billion to Guyana from oil production? Or the extra US$55 billion that Exxon is supposed to give up because Global Witness say Exxon can afford it – ignoring the real world where Exxon answers to its shareholders not Global Witness?
If so, please read page 11 where Global Witness say that their estimate of the extra US$55 billion will be “incorrect” if the international community meets the Paris Agreement targets for reductions in greenhouse gas emissions. Global Witness concedes that, “It is critical that the Paris Agreement targets are met.” So, why don’t they estimate on the basis of the Paris Agreement? Here is Global Witness’s excuse:
“……. Global Witness and OpenOil believe that revenue calculations under a scenario where Paris targets are met should be used for illustrative purposes only. This is because, were the price of oil to drop dramatically, the Rystad estimates upon which the OpenOil analysis is based will be wrong.” In other words if Global Witness includes the ‘critical’ Paris Agreement then the estimates by Global Witness, Open Oil and Rystad are wrong.
When OpenOil and Global Witness take into account the ‘critical’ Paris Agreement they drop their estimate of Guyana’s revenue down to $40 billion over 20 years. Even that estimated US$40 billion is speculative given the way that global energy and financial markets are moving. So, why did Global Witness put out ‘Lala-land’ estimates of US$168 billion revenue and an extra US$55 billion?
Global Witness’s revised estimate of US$40 billion depends on Global Witness’s stated assumptions that the government will monitor Exxon’s production and costs to see that Guyana gets its share, the government will get a fair market price for Guyana’s oil, Guyana will ‘develop the capacity to fight corruption’, and Exxon will take sufficient environmental precautions to avoid a BP type well blowout which Global Witness put at a cost of US$65 billion. Indeed, but we do not live in an ideal world.
Why didn’t Global Witness listen to the many people who have said there are serious legal grounds for questioning this oil deal? Why didn’t they call for respect for the rule of law instead of for renegotiating a deal of questionable legality? Only the judges, acting on the basis of the evidence and arguments presented in court, can determine the legality or illegality of part of any deal and their decisions must be respected by everybody.
Yours faithfully,
Melinda Janki