Aug 11, 2020 Letters Comments Off on Dawning oil realities
The new administration is getting confirmation of the volatility and vigour of oil sentiments and outlook. It is crude, to say the least.
The title of an online article from Oilprice.com is ominous and is filled with foreboding for President Ali and his people. In truth, that applies to all of Guyana, too. The caption of August 9 read, “Are oil majors giving up on Guyana?” Surely, this cannot be happening already. Among the anxieties and alarms in the foreign oil world is the native curse of “resource nationalism” that has reared its ugly and selfish head. Well, that is how it appears to the big people concerned about their investments and returns, and who are the movers and shakers in the oil universe.
The article warned that “Guyana risks losing a whopping 1.5 billion in revenues if Exxon…decides to postpone the Payara project by one year.” Rystad Energy, as stated in the piece, pointed out that “elections helter-skelter” and “political decision making” and the “prolonged impasse” all contributed to a “significant slowing down of government approvals” which “jeopardized the Payara development plan”. Well, the best that I can offer in response is welcome to politics Guyanese style, and get used to it, for there is more from where that came.
Separately, there is no comfort in the breast of the oil people with the new people at the helm in Guyana because, according to Oilprice.com, “a PPP takeover might not bode well with US commercial interests.” In time, those misgivings will mount, unless they get their way. One would ask why this should be so since the PPP owes so much of its victory to heavy American influence and still closer involvement by that country. The answer is simple: “the party had promised to revisit the country’s upstream terms to increase the state’s intake.” I would let my fellow Guyanese know that that is a no-no and equivalent to blasphemy and the kiss of death in the capitalist world. And in that world, there is none more rampaging and rapacious than the oilmen. Guyana may have to be taught some harsh lessons for being uppity with its oil wealth.
But there is a silver lining among the clouds, compliments of the PPP, which oilprice.com was quick to point out. It said, “despite elections vows to revisit Guyana’s milestone contract with Exxon (2% royalty rate and 50% profit sharing after cost recovery)…the new administration seemingly has dropped the subject for good.” Now I had promised to not criticize the new government for the first 100 days, and I am sticking to that word given. All I am doing today is sharing as a messenger. But I sense trouble and am sending an early warning: it will not be smooth sailing. Manage expectations, control actions. The article went on to hail the quality of Guyana’s crude, and that it stacks up well against the competition. That was about the most favourable thing I gathered from this oil albatross that is quickly reminding the PPP of the sharpness of its fangs and the willingness by the oil bosses to deploy them.
Clearly, it is going to be a hell of a rough ride in the days ahead, and that is on more than one front, but with oil always being in the center of things. Good luck, Guyana. I am watching to see how the local political bigwigs are going to react and with what kind of strength and passion. I would hope that all of that was not used up in the recent elections brawls, which are still far from over.
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