By Abena Rockcliffe- Campbell
“Everything must not be taken at face value,” said Opposition Leader, Bharrat Jagdeo yesterday as he spoke about a recently highlighted report from a Norwegian company, Rystad Energy. The report predicts that Guyana will do extremely well post 2020 when oil production is expected to be in full swing.
Jagdeo said, “I saw the thing about Rystad Energy and people are questioning linkages.”
He continued, “Not because a foreign consultancy company puts out a favourable report we must all latch on to it. We have to question the motivation of these companies, particularly consultancies for oil and gas sectors. Some would want to put out favourable reports because they get most of their business from oil companies.”
Jagdeo said that companies can be compensated for publishing reports that can benefit a selected few.
The politician expressed disappointment that some local newspapers republished aspects of the report “as though it was gospel.” Jagdeo also noted that the Department of Public Information, which he described as a “waste agency,” was “running all over the place saying we should have given away everything just to get ExxonMobil here.
“I just want to caution; we should not take these things as gospel, we must check to see the ties these companies have.”
The Norwegian oil and gas research firm, Rystad Energy predicted that that Guyana could rake in billions of dollars annually in oil revenue as the US-based oil giant, ExxonMobil, builds on its “stunning exploration success” offshore.
Rystad Energy said Guyana’s policy to “sweeten the pot with favourable fiscal terms” has worked at kick-starting an industry that will bring in revenue many times the country’s annual budget of US$1.3 billion.
“ExxonMobil’s discovery of the Liza field in 2015 truly put Guyana on the global energy map,” said Espen Erlingsen, head of Upstream Research at Rystad Energy.
“We predict Guyana’s total oil production to surpass 600,000 barrels per day by the end of the next decade. These volumes could generate total annual revenue of US$15 billion from the oil and gas industry. After all costs are paid, around US$10 billion of profit could thus be split between the companies and the government,” Erlingsen said.
He said that in the current fiscal regime, the government collects its share through a two percent royalty and a 50 percent profit oil levy.
Much of what Rystad said contradicts the findings of the International Monetary Fund (IMF). Among other things, IMF considers some of the provisions of the contract to be overly favourable and only advantageous to ExxonMobil.
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