Latest update April 20th, 2024 12:59 AM
Apr 25, 2018 Letters
DEAR EDITOR,
The list of the anomalies of the PSA continues to grow. Recently, it was revealed by the IMF that Exxon will recover the cost of “interest, expenses and related fees incurred on loans raised by parties comprising the contractor for petroleum operations and other financing cost provided that such expenses, fees and costs are consistent with market rates”.
Who will decide what the market rates are? Exxon, I suppose!
The assault on our patronage now moves from agreeing to repay a whopping US$460 million as unaudited cost for Exxon’s quest for oil, to repaying interest on loans for the extraction of the said oil.
It is now crystal clear that Exxon will reap billions in profit without investing a single penny as capital investment, since every dime spent will have to be recovered from our patrimony. The Government’s continued silence in the face of these exposures is deafening! It is clearly operating in defiance of the will of the electorate.
The little “chip cheese” that was expected to flow to locals through local content policy has also been hit hard. The Government has signed up to allow foreign Contractors working for Exxon to have a “free ride” while locals will have to pay their taxes. This is total disrespect! When will the asininity of this oil contract get to the heads of the Coalition to warrant a change?
Speaking of the leaked document from the IMF to the Govt., one Minister is reported to have said that Govt. is working on a menu of recommendations, one of which includes employing a more progressive tax regime for the oil sector.
It was emphasised that the IMF made it clear that, “there is nothing you can do with those (contracts) you already signed. So whatever they recommend is going forward. You already signed!”
What the Minister is confessing here is that with one stroke of a pen, Government’s representative permanently signed off the better half of Guyana’s patrimony on its oil resource in the Stabroek Block to Exxon.
Because of the Govt’s continued reluctance to renegotiate the PSA, it is trying to use the IMF as a source of sanctification of the document. The IMF made an analysis and compared the PSA with other PSAs. The IMF will never mention anything about renegotiation or compliance in its analysis of any document – that would be a conflict of interest. The Minister was peddling fake news. The IMF will never risk being accused of interfering in any Country’s internal affairs.
A few weeks ago, the Govt. was offered free assistance to renegotiate the PSA but declined. Jan Mangal, presidential advisor on oil and gas seems to have been exiled for saying that Contracts need to be dynamic (open to changes). On that occasion, the President had said,” The advisor advises me and any decision on policy will come out of the Cabinet.” Cabinet’s decision not to renegotiate the PSA is more of a fallacy than a policy.
Guyanese must now ask themselves the big question. Would they be willing to enlist the services of a Coalition that taxed the milk out of their tea and gave away their patrimony, beyond 2020?
Rudolph Singh
Where is the BETTER MANAGEMENT/RENEGOTIATION OF THE OIL CONTRACTS you promised Jagdeo?
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