Opinion
The real issue is the threat which this oil arrangement poses to the country
I refer to the letter, `Why is Janki so opposed to the ExxonMobil deal?’ under the name of Clement Smith. I should have thought the answers to that question were already abundantly clear. I have repeatedly said that Minister Trotman’s behaviour was incompetent, irresponsible, naïve and foolish in the oil arrangement he agreed with Esso…
Court begins hearing appeal over challenge to Exxon’s partners
The Guyana Court of Appeal yesterday commenced hearing the appeal filed by Ramon Gaskin, who has sought to challenge the granting of a petroleum production licence to the partners of the local Exxon subsidiary, Hess Guyana Exploration Ltd (Hess) and CNOOC Nexen Petroleum Guyana Ltd (Nexen), as he contends that they have no environmental permits…
Economists, Janki pessimistic about oil future -around US$900m in costs already racked up even before first barrel
Guyana has struck oil but for the panelists at a discussion on Wednesday there is no reason to celebrate. In fact one panelist argued that there are actually grounds for saying that government acted illegally in signing to such terms. On Wednesday, the Moray House Trust held a panel discussion where economists Collin Constantine and…
We need many more local activists on oil and gas matters
On May 17th, 2018 the Stabroek News published a letter by Mr Clement Smith in which he questioned the motives of A Fair Deal for Guyana with respect to challenging the oil contract. In that letter he stated, “But the saddest part of all is that local activists are getting involved.” We disagree with Mr…
Focused action needed now for a 10% royalty from Exxon/Esso
Guyana agrees to pay Exxon’s Esso – a US$460 Million Bonus, and labels it precontract costs, which is 2,500% higher than US$18 Million that was received by the Government of Guyana and referenced as a “Signing Bonus.” The reference is a misnomer to the extremities of accounting classification – Copper Signing Bonus is a more…
Chapter #1 – The Breach of the 60-Block Maximum
Recently, the number and prominence of foreign analysts who have corroborated the early view expressed by local analysts have increased. This is the view that the contract is heavily weighted against Guyana. Two of these foreign analysts have been OpenOil and the IMF. Yet, there is one aspect of the consideration of how bad a…
How can we trust that the oil cost would be allocated fairly?
The oil contract contains a loophole that may tempt the oil companies to get around the 14.25% of revenues minimum limit cited by some analysts. The only guarantee is the 2% royalty, but the 50%/50% profit share can be exploited such that Guyana’s average take is less than 14.25% in earlier periods. On April 1st, 2018…
Political cooperation is necessary for escaping the natural resource curse – Part 7
We explored the idea of the resource curse in six previous columns before analysing the cost aspects of the oil and gas contract. We took a break from this topic in the previous three successive essays. Last week’s essay looked at how recurring costs could have an interesting effect on the long-term average cost oil…
The crafty contract and Guyana’s implicit and explicit earnings
By now many Guyanese would have heard about the 14.25% effective royalty, which combines the 2% actual royalty enshrined in the contract, the 50-50% profit share and the 75% cost-recovery cap. According to Article 11 of the Petroleum Agreement between the Guyana government and ExxonMobil subsidiaries, the cap on cost recovery is monthly. This…