The government, its acolytes and the misguided are attempting to shift the focus of the debate on the oil industry by urging that emphasis be placed on what is to be done with the revenues. Well, if the people have had little say in the manner in which the deal with ExxonMobil was negotiated, how much of influence are they likely to have in terms of how oil revenues are to be spent.
So arguments are to be made that Guyana’s economy is going to be doubled or tripled when the 500,000 barrels of oil per day are produced. Never mind that when it comes to Liza Phase 1, we are only projected to produce 120,000 barrels per day, but we are told that 500,000 is in the works.
Many decades ago, when workers were striking for higher wages and shorter working hours in industrialised America and Britain, they were told that if they worked longer they would earn more at the end of the day at the same low wages. In other words, they were being asked to sacrifice higher wages in order to obtain longer hours of work.
It is the same choice that Guyanese are being asked to make. Guyanese are being told not to bother with the fact that ExxonMobil is underpaying us on every barrel of oil. We should not be worried about that because with more production, there will be more revenues overall. In other words, to use the previous analogy, if you work harder and longer for the same low hourly wages you will end up earning more than if you work shorter hours for higher hourly wages.
Guyanese are being told not to worry about the low fiscal take on every barrel of oil. They are being advised to concentrate on how many barrels will be produced or to put it more subtly, is it okay to be shortchanged, once at the end of the day your basket is fuller?
That line of argument has never convinced the working class who struggled successfully for higher hourly wages and shorter working hours. It is not going to convince Guyanese that they have been shortchanged in the negotiations with Exxon Mobil.
Oil does not spoil but it also does not renew itself. Like gold, it is a non-renewable resource. So the more oil that is extracted each day from a well, the shorter will be the lifespan of the well. There is little comfort therefore in producing four times more oil per day than the daily projected production of Liza 1. The faster the production the quicker the wells will end and more wells will either have to be found to sustain production.
The second line of argument is that Guyanese should concern themselves with how the oil revenues are going to be spent. Guyanese are more interested in what share of the money will go their way. There is no guarantee that the monies will trickle down to the small man. Venezuela has been producing oil for over 100 years and yet has always been widespread poverty in that country.
Guyanese know that when the government speaks about using oil revenues to improve infrastructure that not much of that money will come the small man’s way. The PPPC spent and borrowed billions of US dollars during the era of reconstruction and who benefitted the most from that spending? The contractor class… They are ones who benefitted the most. Public servants still are not being paid a living wage despite Guyana now being a low middle income country.
The third argument being made is that Guyana had to accept what it got from Exxon because of the fact that we were under a threat from Venezuela. In keeping with this argument, ExxonMobil was taking a huge risk and therefore had to strike a hard bargain.
The argument is contradicted by both ExxonMobil and the government. The government has always said that it was confident of victory in any juridical settlement. If the government was so confident, then how come it is now saying that ExxonMobil was taking a huge risk by investing in Guyana? One month after the government signed the oil agreement with ExxonMobil, a top government Minister said that Guyana was not worried about Venezuela taking action against Exxon.
ExxonMobil itself has said that it is not too worried about any threat to its operations by Venezuela. That however, has not stooped its apologists from trying to convince the Guyanese people that the Venezuelan threat created a high-risk investment climate in the oil sector.
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