– Deal so fundamentally unfair that it is free money for oil company
By Kiana Wilburg
ExxonMobil has claimed that it can take its investments elsewhere if it does not get its way with Guyana on the Payara Field Development Plan (FDP), for which government approval is still to be granted, but industry experts are not buying into this threat by the American multinational. President of the Centre for International Environmental Law (CIEL), Mr. Carrol Muffett has categorically stated that ExxonMobil’s comment indicates how scared it actually is.
During his second appearance on Kaieteur Radio’s show, ‘Guyana’s Oil and You’, the CIEL President said it is useful for Guyanese to pay attention to the financial health of ExxonMobil before it was hit by the COVID-19 pandemic. In this regard, Muffett stated the company had lost more than 50 percent of its share value in the last decade while adding that it is losing money in the parts of its portfolio that it had long term growth opportunities and projections.
The CIEL Chief executive said, “…So this is a company that was in really bad shape coming into the pandemic and the pandemic has really exacerbated that state of affairs…Now ExxonMobil was telling investors that another big area for revenue growth was petrochemicals and plastics and it was arguing to investors that the world needs more of this.”
Muffett added, “But that has been proven to be overly optimistic hence it lost over US$300M at the end of last year. We are also seeing prices for plastics and other petrochemical feedstocks struggling in the wake of the pandemic.”
Outside of its operations in the USA, Muffett stated, there is no other country ExxonMobil is operating in that gives it free money the way Guyana does. He stressed that it has no deal that can compare to being so fundamentally unfair as the one it has with Guyana.
The CIEL President said when one considers the dire financial situation this company is in, the fact that it is paying out more in dividends in a year than it is bringing in in revenue which means more debt, it is clear that Guyana is its last hope. He said, “Guyana remains the truly last promising and positive growth story that Exxon has to sell to investors…And in my own view, the reason why Guyana is so promising for Exxon is because the deal is so fundamentally unfair to Guyana that it is free money for Exxon.”
Muffett concluded, “So when you see Exxon making threats that it would not make sense to invest if it is faced with pressure to change the current arrangements as it would not be economical for them, I think the fundamental question is if it is not economical for Exxon to do this project while being fair to Guyanese then why do it all?”
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