Latest update April 25th, 2024 12:59 AM
Jan 30, 2021 Features / Columnists, Peeping Tom
Kaieteur News – Guyana is not getting anything free from the oil companies. Guyana is paying for the assets, which are being used by these companies in its petroleum operations.
At the end of the agreement, Exxon, CNOOC Nexen and Hess – the signatories of the agreement – will hand over to the Minister all the equipment for which the country has paid in full through cost recovery. For those equipment for which the full cost is not recovered, Guyana has to pay the unrecovered cost of the equipment.
Guyana is therefore the owner of the assets, which are being procured, on its behalf by the oil companies. These companies should rightly be paying Guyana for the use of these assets. However, this is not because our visionary leaders did not see the necessity of negotiating for a say in expenses incurred by the oil companies.
The Production Sharing Agreement, signed between the Government of Guyana and Esso Exploration and Production Guyana Limited. CNOOC Nexen Petroleum Guyana Limited and Hess Guyana Exploration Limited, allows the oil companies free use of what is acquired for their petroleum operations. The agreement goes as far as saying these companies shall have free use of any equipment, which they had used in a relinquished area and wish to now use in the remaining portion of the concession.
In addition, while we are repaying for the assets, which are being used by the oil companies, they are not paying Guyana a fee, rent or lease for their usage. They have free use of everything, which is being paid for by us.
At the end of production, we have to still pay them for anything, which the full cost has not been recovered. That is tantamount to you having to pay someone for living in your home.
To add insult to injury, the agreement allows for the oil companies free use of the assets by virtue of them signing some other petroleum agreement after the present one expires. In other words, they will have free use to explore and produce oil under another agreement.
These lopsided arrangements have been shoved down our throats. Exxon is acquiring whatever assets it wants. Guyana has absolutely no say in determining what is acquired, from whom it is acquired and the price at which it is acquired, even though the country will have to repay every blind cent that is spent in petroleum production.
The oil companies are housing their employees at international hotels. Some of them are bringing their pets. Guyana is fetching the Bill. These types of expenditure do not require Ministerial consent. The employees of the company therefore can live lavishly, knowing that Guyana is picking up the tab and has no say in where they stay in Guyana, how much they eat and what they drink.
The Audit report is not going to reprimand managerial decisions of this nature. So the audit is no safeguard against Exxon acquiring super-expensive assets or providing luxury services and accommodation to their staff.
Our leaders have tried all manner of excuses to justify these untenable provisions. One went as far as saying that the total banking assets of the country in insufficient for the type of investments, which are being made by the oil companies. What he did not state is that these investments are recoverable and therefore we owe no obligations to the oil companies.
Another leader had said that the oil companies were taking a major risk because if they did not find oil, they would have lost their pre-discovery exploration costs. But that leader did not state that when oil was found the entire basin was de-risked and, therefore, this should have formed the basis of renegotiating a proper agreement prior to the granting of a petroleum exploration licence.
When all the surveying, drilling and pumping is completed, the oil companies will dump all the assets for which full recovery has been paid. They will dump it in Guyana since the contract provides that they have to deliver it to the Minister of Natural Resources.
Guyana will therefore become the scrapheap of the oil companies. It will have to accept all those pipelines and other equipment, which the oil companies would have exhausted in using… and for which Guyana is paying.
That scrap has no resale value. Just like the natural gas, which Exxon wants to charge us for transporting to shore!
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)
Jagdeo giving Exxon 102 cent to collect 2 cent.
Apr 25, 2024
By Rawle Toney Kaieteur Sports – The French Diplomatic Office in Guyana, in collaboration with the Guyana Olympic Association and UNICEF, hosted an exhibition on Tuesday evening at the...Kaieteur News – Dr. Bharrat Jagdeo, the General Secretary of the People’s Progressive Party, persists in offering... more
By Sir Ronald Sanders Waterfalls Magazine – On April 10, the Permanent Council of the Organization of American States... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]