Sep 06, 2020 Editorial
It is a tale of two stories rolled into one, almost like inseparable Siamese twins. On the one hand, there is Guyana’s oil discoveries again being hailed as among the most “exciting” in years. On the other, the fortunes of ExxonMobil are in the full out swoon of a nosedive.
Reference is the news article titled “Exciting Guyana prospects needed to rescue Exxon shareholders -Analysts, but oil company still refuses to give Guyana a fair deal” (KN, September 2).
The commentators were no less an illustrious authority than the stable of analysts from New York-based Goldman Sachs.
As a world-class power in the world of investment banking, they do not come any better, any more prestigious than Goldman Sachs. For what Goldman gave Guyana is the equivalent of gold seal and blue ribbon. That is worth its weight in gold, and especially because the KN article detailed the lengths to which Goldman Sachs went to expose the vulnerability of Exxon and how much the company depends on Guyana’s oil to rescue its waning fortunes.
We offer a couple of excerpts to highlight the precarious financial state in which Exxon finds itself today, of how much it relies on Guyana to bail it out. It is why we find its hard stare and hardline stance so inexplicable. First, “When analysts at the bank recently checked the financial health of the company, they told the market that ExxonMobil’s shares should be sold as quickly as possible.”
When a company such as the Goldman Sachs Group Inc. places, what in Wall Street speak is, a “Sell Rating” on a security, then a deep dive into the tank usually follows, which is exactly what has been the dismal experience of the oil giant.
It is the kiss of death, which moves markets and bring out the sellers, who went ‘bearish’ on the security. When the huge holders of the company’s stock rush for the exits, such as the giant investment companies (mutual funds) and their investment managers, the haemorrhage could be instant and immense. For second, it is in this boat where ExxonMobil finds itself, as carried by KN, “Goldman and Sachs (sic) said that since 2017 the company has seen a 50% decline in stock price and the degradation of its balance sheet…”
Those two are killers and only the bargain hunters could be tempted to be on the “Buy” side of the stock. It is full speed ahead and damn the torpedoes.
And third, as if to twist the knife in the wound, it was noted that “Exxon was booted last week from the Dow Jones Industrial Average.” Being a part of the Dow is recognized worldwide as being among the elite of the elites, so when Exxon is kicked off that stock market barometer, it adds insult to injury.
It is also why, given the current state of the company, that the unmoving behaviour of its corporate chiefs, regarding Guyana, becomes so mystifying and disturbing. Industry experts said that “Exxon’s deep-water discoveries offshore Guyana have been the most exciting part of its exploration program in recent years” and that they “will bring its shareholders billions in returns.”
So what more could this company want in its avariciousness? What more could it desire so greedily that it must be everything for itself?
Bright, rich sweet plums for itself, and peanuts and pennies for Guyana are what Exxon’s management holds out is a real sweetheart of a deal for Guyana. Clearly, the senior people at Exxon insult us and take us for granted, as if Guyanese citizens do not know how to count, and have no sense of the value of our oil and the money that should come to us from it. But we have a sharp small warning for its people: this business involving our oil is not going to go away anytime soon. It is not going to die down and fade away, for we will not do that to ourselves. We will fight for what is rightly due to us. We will not blink, which is why we ask Exxon to think and then rethink about how it plans to proceed on this oil.
We deserve better and that is the sum of what we are asking the powerbrokers at Exxon to do. Engage us across the table in a spirit of frank and fair and full discussions. We all stand to make money from these deep-water discoveries, good money, where Guyanese come out with a better share of our oil deal, and the company gets to place before its shareholders and the public that it operated squarely and wisely with us. It is good for its reputation, very good for its bottom line, and it is good for our pockets from whatever is bargained for in hard fought negotiations. If we cannot make money on these “most exciting” and massive oil finds, and they become a losing proposition for this country, then we might as well leave it where it is at, which is below the ground.
Given the fact that “the multi-national has sold off many of its assets around the world to focus on its Guyana operations” which is now “the crown jewel of its portfolio”, ExxonMobil has more at stake than Guyana in its ongoing oil contract struggles.
It has more to lose, much more to fear, and we ask its people not to misjudge us, relative to the intensity of our resolve. We place this on the table, because we were taken aback by how its Country Manager, Mr. Alistair Routledge, responded to our position on the Payara Field Development Plan. It is not the way that genuine partners deal with each other face to face and at arm’s length. Never!
We are trying to say this nicely, but we found Mr. Routledge’s tone and attitude to be condescending and intended to be degrading, as if he had to show these treetop natives from Guyana who is the boss. We know insulting language when we hear it. And no matter how there was cleverness to disguise the iron fist in the velvet glove, by using corporate buzzwords, we are not fooled.
We do not want to play hardball, but if we are forced to go down that road, then we will have to band our bellies and let the chips fall wherever they do.
We are looking very closely at our new political leaders to determine the seriousness of their determination to rework significant and sensitive provisions in the contract, so that we can get more. We do not want an arm and a leg, only what is right, what is of the justness of our cause.
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