Former Petroleum Advisor to the President , Dr. Jan Mangal has said that Guyana would still get a substantial revenue share from oil even when the price is sent crashing, once royalty on every barrel is set at a fair level of 15 percent.
He made these and other comments in a recent Facebook post.
Initially, it was projected that 2020 would see Guyana getting about US$300M in revenue from the two percent royalty, and 50 percent profit share after costs are recovered by the oil companies.
Attorney-at-Law Charles Ramson Jr. had later revealed to Kaieteur News that the crisis in the oil market, which caused prices to crash, has severely cut down Guyana’s short term revenue share. He had said that when Guyana calculated its take from the Liza project, calculations were done using the US$55 a barrel oil price. But the oil price has dropped so far that Bloomberg yesterday had the price of Brent crude at less than US$25 a barrel.
The crash is due to fear of the coronavirus and a continuing oil price war between Russia and Saudi Arabia.
Dr. Mangal said “Guyanese are worried that the crash in oil price means they will receive much less than the initial estimate of US$300M in the first year.”
“Correct, the worry is justified,” Mangal added.