Guyana could lose US$5 Billion for paying Exxon’s taxes from Liza 1 & 2 alone

Jan 27, 2020 News

…Greenidge and Trotman should explain – Former Presidential Advisor

Government’s refusal to renegotiate the Production Sharing Agreement (PSA) for the Stabroek Block, could see Guyana losing US$5B from Liza – Phases One and Two alone, because of the permanent tax holiday granted to ExxonMobil and its partners, Hess and CNOOC.
Government officials who staunchly refused to renegotiate should explain why this should happen.
That is the insistence of former petroleum advisor to the President, Dr. Jan Mangal.
During his time in that capacity, Dr. Mangal had staunchly advocated for the agreement to be renegotiated to get Guyana better terms.
Several sections of society have criticised the deal as being lopsided and unfair to the State.
One facet of the contract that has been identified as a cause of major revenue loss for the State is the tax holiday, which Government decided to grant ExxonMobil. The agreement doesn’t just waive a series of taxes. But Government intends to give tax certificates to the companies, ensuring that they’re not taxed in their home countries.
Taxation tends to be a major source of income for oil producing States. Dr. Mangal said, by some estimates, that Guyana could lose US$5B.
When asked to demonstrate how he arrived at the US$5B figure, Dr. Mangal indicated that a simple economic model was developed at the Inter American Development Bank for Liza phase 1. He said that he performed an extrapolation to include Liza phase 2.
That money, the Consultant insists, could be spent on so many projects that could improve the lives of ordinary Guyanese people, such as better salaries for teachers and nurses, the building of schools and hospitals, reliable water supplies and electricity plants, better roads and even railway systems.
Many of these are promises Dr. Mangal noted Granger has made, in his bid to give people ‘the good life’.
“Why are Guyanese taxpayers paying Exxon’s taxes?”
That is a question the Consultant believes certain officials should be held accountable to answer, namely Minister of Natural Resources, Raphael Trotman; former Foreign Affairs Minister turned Foreign Secretary, Carl Greenidge, and Ministry of Foreign Affairs Advisor, Sir Shridath Ramphal.
Dr. Mangal said that they should explain why they believe Exxon should be the beneficiary of that money, instead of the people of Guyana.
ExxonMobil’s field development plan for its third project on the Stabroek Block, Payara, should not be approved unless the “disgraceful” agreement is renegotiated, Dr. Mangal opines.

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