One loophole closed, more must be

May 19, 2022 Editorial

Kaieteur News – It is a small beginning, but a significant one that holds out the promise of what could be, the long journey that waits to be undertaken. It must be, now that the first step has been taken. The essence of this small start is under our caption, “Govt. plugs loophole for accurate measurements of oil without renegotiating Stabroek Block deal -Yellowtail licence reveals” (KN May 11). Indeed, where there is a will, a way is usually found, no matter how difficult, how impossible the task that stands before appears.
We welcome this movement, and we commend the leaders of the PPP/C Government for thinking of it, pushing for it, and succeeding at it. The same skill, resourcefulness, and more dogged determination must be brought to bear so that other loopholes, bigger and still more material ones, could also be closed. Guyana can only benefit when such is the case, for loopholes represent leakage in the best of instances; or, when the situation gets really out of hand, through what is exploitative and haemorrhaging. Hence, measuring how much oil is being produced is as good a place to start as any.
As the article referenced noted, “The government has done so by inserting a suite of robust provisions on measurements into the Petroleum Production Licence (PPL) for Exxon’s US$10B Yellowtail Project.” We have always held the position, and listed among the many recommendations that we have put before the PPPC Government, that we work to undo the disastrous lopsided oil contract with ExxonMobil in mainly one of two ways. We can go head-on in challenging the contract, or we can use these big new oil projects as leverage, or bargaining chips, to squeeze concessions out of Exxon, and get a steady flow of benefits for Guyana.
For sure, they may appear small at first, but they are incremental in the long run. They add up, and before long, through continued diligent and versatile effort, we can succeed at wearing away at some of the provisions (‘low hanging fruit’) in the one-sided deal that is all in Exxon’s favor.
Now, we will be able to monitor and verify for ourselves whatever figures Exxon hands to us by way of reports and such. It is not only the amount of oil coming out of the Yellowtail field, but also the quality and composition of this precious commodity. Both of those have an impact on either the selling price, or the cost of refining the raw crude into other fuels or petroleum byproducts.
It is comforting that the instruments and the related procedures to be used in these exercises must be not what Exxon shoves before us, but what meets “good international oilfield practices.” Further, that good notice of measurements times and dates must be given to the minister standing as overseer of our oil asset. And, when there has to be resetting of measurement instruments, agents of the state must be present. These developments may look minimal in the bigger picture of the overall oil contract, but they count because there is always opportunity (and temptation) for this country to be cheated at the pump, meaning, at the source of our oil, the oilfields themselves.
Using this loophole shut off, leaders in the PPP/C Government must now demonstrate the strength to venture into other bolder territory to close out gaps presented by other loopholes. They are many because Exxon has been around the oil business forever, with few knowing the tricks of the trade more than this giant American company. Though we regret the opportunities that went a begging, Guyanese cannot continue to lament endlessly, curse each other continuously, and wring hands helplessly.
We must act and with a steeliness in our minds. Our leaders must work tirelessly to get something for our oil, much more than we are getting now. This is in motion with the qualitative steps that have been agreed to in the Yellowtail Project (loophole closed), and which must now escalate into the quantitative, in how many more dollars come into Guyana’s coffers. The longer we don’t get those additional dollars for our oil, the more we end up losing. Those loopholes must also be closed through wise, relentless efforts.

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