Sep 24, 2022 News
Kaieteur News – Our Wealth, Our Country (OWOC) – a fairly new civil society body that has joined its voice to oil and gas related matters – has called out Vice President Bharrat Jagdeo for failing to address matters of great national interest when he appeared on the Glenn Lall show on September 13, last.
In a statement to the Press, OWOC said it was particularly disappointed that Mr. Jagdeo failed to answer relevant questions relating to the management of the sector, while in some instances he provided ‘shocking’ responses.
For instance, the group explained that on the issue of expense it currently does not appear that Guyana’s leaders know exactly what the country is being charged, the interest rate attached to repaying the loans to Exxon for the development of its resources, and whether the nation is collecting inflated costs above industry average for the rental of drill ships, among others.
Moreover, OWOC argued, “While Guyanese companies and individual taxpayers have to pay their taxes, we are also shocked that the VP disclosed that he does not believe in charging a rich multinational corporation making billions in income ‘corporation taxes’. No wonder he refused to answer Mr. Lall’s question whether he wants Mr. Lall to win the tax case filed against the Government and Exxon.”
To this end, the activist group insisted that the people of Guyana ‘deserves better’.
When it comes to renegotiation, the group pointed out that when the Vice President was asked if he was still critical of the oil contract as he was during the 2020 election campaign, Jagdeo said he was. The group quoted the VP as saying “‘… we maintain that the contract is lopsided and we also said consistently in opposition that we will not renegotiate the contract, we will ensure that we have better contract administration. If we fail to have better contract administration, and there was no room for that, then we’ll take a harder line’.”
To this end, OWOC said it finds this response ‘puzzling’ as the People’s Progressive Party (PPP) had promised in its 2020 manifesto to ‘review and renegotiate’ the contract to ensure Guyana is not holding the ‘short end of the stick.’ As such, the group asked, “why has the PPP Government not done anything to modify the contract to make it fairer to Guyana? You cannot say the contract is lopsided on one hand, and on the other hand, you do not plan to ask for changes in the contract, and are vowing not to ever renegotiate the contract. When the contract was signed, we had an estimated 3 billion barrels of oil. Now, the estimate is 11 plus billion barrels of oil. Is renegotiation not justified?”
Additionally, OWOC reasoned that it is unsure of what the PPP’s manifesto promise of ‘better contract administration’ means since Guyana is currently collecting a meagre two percent royalty for its oil resource and a profit share of 12.5 percent while the oil companies take 85.5 percent of gross income from this stream.
In light of this, the group said, “How will contract administration yield more income? The world’s average ‘take’ (income) for an oil producing country is approximately 62%; Guyana’s take is only 14.5%, and Guyana collects no taxes.”
The civil society body noted that the Government has failed to do audits of the oil accounts in a timely manner, and has belatedly decided to get it done in response to public pressure. The organisation therefore concluded, “Our inexperience with oil administration is blatant and Guyana clearly is being taken for a ride. Exxon had done excessive flaring and still continues to flare. EPA enforcement appears to be lax and weak, and lawsuits have been filed to challenge such perceived lapses in environmental enforcement.”
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