Erin Northe has written a nice letter to commemorate Cheddi Jagan’s death anniversary in SN Letters (March 2nd), titled: “Take time out to reflect on where we are in Dr. Jagan’s vision”. This letter provoked a comment on the online edition from Fuad Rahaman. It reads: Focus on PPP leader, Dr. Bharrat Jagdeo’s vision! It’s 2024 and the country’s rapid ascension under President Ali and team’s leadership is making heads spin. Dr. Cheddi Jagan and wife will forever occupy a great place in our history. Their vision of national unity, progress and prosperity remains today, the mission of the PPP.
I comment as follows: What’s the meaning of this sentence in Rahaman’s post: “It’s 2024 and the country’s rapid ascension under President Ali and team’s leadership is making heads spin”? Was Cheddi Jagan’s leadership of a lesser caliber? Or is it the discovery of 11 bb of crude the main reason for “making heads spin”? [Equating Ali with Jagan? Gimme a break]. And, Jagdeo’s transactional leadership: What vision is that? Exxon is claiming FRR, First Refusal Rights, in Hess’ proposed sale of its 30% shares to Chevron. Does Guyana, as owner of the oil resource, have any FRR? Or even the right to demand renegotiation of a lopsided 2% Royalty contract? Have all of this been ceded away – portions of our nation’s sovereign rights – to Exxon?
There have been several new discoveries (no barrels’ reserve mentioned). Exxon alone is privy to these new reserves of crude: Is that the main reason why Exxon seeks to pre-empt Chevron from the chance of buying these shares for a reported $53 billion? The announced deal between Hess and Chevron was made in October last year – and Guyana’s Oil Czar Jagdeo never batted an eye. Ali borrowed CAPEX and interest on borrowed money are taken off the top of revenues as Cost Oil – so shouldn’t GoG opt to buy those shares? [It wouldn’t cost Guyana any money from its national treasury].
Or only Exxon knows the value of those resources, not Guyanese people or Gov’t’s leaders? Are the Guyanese people natives straight out of a Joseph Conrad’s novel, not knowing the value of money? Guyana has solid collateral and would qualify easily for billion-dollar loans. Jagdeo’s line of reasoning is flatly wrong when he says foreign investors would be scared away if Guyana were to opt to renegotiate – or to offer to buy Hess’s 30% shares. The world’s money-market place is flush with dollars. The only thing to scare away investors is the threat to nationalize, too much risk, or not enough reserves. Guyana does not pose any of those risks.
Why did Jagdeo lay down such a firm No Renegotiation Policy? Is it to get him personal favours from Exxon? Certainly not to position his nation to get Fair Value for its oil resource? Has Jagdeo once articulated reasons for Renegotiation? What is Mr. Jagdeo’s vision? He has always stood firmly against renegotiation. Even that, in itself, might not be so bad. He now goes much further: He is defending the 2% PSA. His argument: The 2% Royalty is much better than a 6.25% Royalty – because Exxon is ramping up production from 460 thousand bpd to 1.5 million bpd. You are now giving away your non-renewable resource at a rapid rate for the same 2% royalty.
Is this better, really? To say nothing about the 75% cost recovery and zero profits tax – and absence of ring fencing. Jagdeo’s justification: “Limited window to monetize resources”. Does Exxon believe that? The record shows Exxon does not believe the window is limited as reported. Facts do not support Jagdeo’s “limited-window” view – whether it is 30 or 50-years. Exxon’s goal is to drill all the oil as quickly as possible at 2% royalty. Should Jagdeo align his nation’s goal with that of Exxon’s?
Attorney Fuad Rahaman insists on doing PR for Mr. Jagdeo on this SN online platform. Nothing per se is wrong with that – but Fuad must come up with better facts and better arguments. Man, Jagdeo has no vision at all. He is a sell-out. Just watch Jake Tran’s video and read Amy Westervelt, “How Exxon conquered Guyana without firing a shot?” Another anonymous blogger, Col123 went on the rampage to excoriate Cheddi Jagan’s whole life-long career saying: Jagan sat there as “Chief Communist”, while Guyanese cut and run from Guyana. Col123 should know better. Large numbers of Guyanese people fled the country because of a collapsed economy under the Burnham dictatorship. It is hard to blame Jagan for that.
I shall say this about Cheddi Jagan: Cheddi Jagan was the decolonization leader of record. He articulated reasons for self-governance and Independence. He founded and organized a political party to realize those goals. By any judgment he was a progressive leader (read about his policies for rural and hinterland health clinics and hospitals, expansion of free high schools and university, Dawa pumping station that made thousands of acres of land irrigable, Black Bush Polder expansion for crop lands, etc.,). The Cold War made things complicated in that era and Jagan’s affinity with Communist ideology got him into trouble. His one mistake in his long political career.
In summary: Mr. Jagdeo knows nothing about managing Guyana’s oil industry. His management will see Guyana losing upwards of $100 billion on 11 barrels of low-sulfur crudes. He is no visionary leader. Period. The Guyanese people must organize and fight to regain portions of their Sovereign rights ceded to Exxon – and must claim the right to bid for those shares, currently in play, Hess is selling for $53 billion to Chevron. How much did Hess pay for those shares btw – $15 billion, $25 billion? – and does Guyana, by law, stand to collect Capital Gains’ tax on that sale? Does Mr. Jagdeo know – with all those new discoveries – what is Guyana’s oil reserve as of today: Is it 11 bb or 21 bb? Does Exxon have the right to withhold that information from the Guyanese people?
Sincerely,
Mike Persaud
Article Originally Published At: https://www.stabroeknews.com/2024/03/05/opinion/letters/useless-comparing-jagan-with-jagdeo-who-is-clueless-on-how-to-manage-guyanas-oil-bonanza/
