Opinion
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…
Proposed oil production should be put on hold–Int’l Lawyer
…Says this is necessary until Govt. can show what an oil spill could cost Guyana Article 149 J of the Constitution mandates that the Government shall protect the environment for the benefit of present and future generations. It is expected to do this through reasonable legislative and other measures designed to prevent pollution and environmental…
Guyanese campaigners mount legal challenge against three oil giants
Crowdfunded case claims offshore oil licences were granted illegally by the Guyanese government Offshore drilling off the coast of Guyana is being seen as the most sought after prospect in the world for oil companies. Analysts predict offshore drilling could provide 350,000 to 400,000 barrels a day by 2026. Three major oil companies preparing to drill off…