Economist Tarron Khemraj says that from all of the analyses he has seen of the oil deal for the Stabroek Block, Guyana will end up getting just around 37% of the gross revenues while ExxonMobil and its partners will cream off the rest. See more here
The previous six columns asked the question whether Guyana could escape the natural resource curse. We have looked at the issue from various dimensions. In particular, we have observed that initial conditions prevailing in Guyana must be taken into account when making such a prediction. The present structure of the production economy and limited economic…
The previous column explored how the lack of economic research capacity might have contributed to the lopsided contract in favour of ExxonMobil. One misconception that is often expressed in various Guyanese quarters is observers like yours truly never worked in the oil industry, therefore, we do not know about negotiating a PSA-type oil contract. Indeed,…
Making prediction in a complex and nonlinear world often involves identifying initial conditions and then sequentially reasoning (or solving) forward. One way of knowing how well Guyana will do with its newfound oil and gas resources is to consider the initial conditions that exist in the country today. In this column and future ones, I…
Whether Guyana becomes “immensely rich or just another Trump-hole” from oil revenues depends largely on its ability to attract specialty experience and competencies in industry and sectors here, says business website Bloomberg. “Guyana could attenuate the brain drain by reaching out to its diaspora,” Bloomberg yesterday reported. “There are more than 100 reported expatriate organizations,…
I have just read an interesting account of Cost Recovery as provided for by the Profit Sharing Agreement between GoG and the Oil Company. (KN Feb. 10th, Pre-contract cost… US$460M seem to have been pulled from an alternate universe – Nigel Hinds). It appears every penny incurred by the Oil Company – including interest cost…
In the previous column we explored the possibility of Guyana becoming a petro state overnight. A petro state is one in which most government revenue comes from oil royalties and profit share. The government is then tasked with spending and distributing these funds among competing interests. The last column was sceptical about the Guyanese state’s…
Although Guyana is expected to become an oil producer, energy expert Dr. Vincent Adams says agriculture and renewable energy will actually be its keys to long-term sustainability. Adams told Sunday Stabroek that this will be what he will be telling not only government but Guyana’s citizenry when he returns this year, after serving in several…
The second part in this series addressed the question of how much money Guyana will likely receive. It is generally known today that the Production Sharing Agreement (PSA) is quite favourable toward ExxonMobil. We tried to understand this within the context of the Anglo-American corporate governance framework, which sees a corporation as having the sole…
With billions already gained on the stock market from its oil find here, ExxonMobil and its partners can “more than afford” to pay Guyana US$1 billion instead of the US$18 million received as a signing bonus, according to energy expert Dr Vincent Adams, who also strongly believes that the government should go back to the…
