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Guyana foregoes US$Billions in oil profits for ExxonMobil’s benefit but has no seat at the table or say in decision-making
– VP Jagdeo either reckless or couldn’t care less by allowing this to happen – Chartered Accountant, Chris Ram
Kaieteur News – The Guyana Government has insisted for over three years that it would not impose ring-fencing provisions on ExxonMobil’s multi-billion dollar projects in the Stabroek Block.
Chartered Accountant, Chris Ram
Despite persistent advice from local experts to implement such a safeguard, the government has refused to accept that its approach leaves the country losing millions of US Dollars in oil profits.
Ring-fencing, in simple terms, means that a project must pay for itself; its revenues/profits must not be used to cover expenses for another project. If this measure were in place for the Liza Phase One and Two Projects which are currently producing about 400,000 barrels of oil per day, Guyana’s current share of profit oil as well as royalties would have increased significantly by now.
In the absence of this measure, Exxon is allowed to use profits from the Liza Phase One and Liza Phase Two Projects, that should have been shared with Guyana, to instead, cover the expenses of exploration programmes in the Stabroek Block as well as the development costs for other projects.
Chartered Accountant and Attorney-at-Law, Christopher Ram recently registered his disappointment with the government’s refusal to arm any of ExxonMobil’s five sanctioned projects worth over US$40B with any ring-fencing provision. In a recently published column in the Stabroek News, Ram said Guyanese authorities have made the country an involuntary investor in the Stabroek Block since Exxon gets free reign to redirect the oil profits away from Guyanese and into its development programmes.
Vice President, Bharrat Jagdeo
Ram said, “In other words, the government is putting up 50% of the exploration investment – equal to the combined investment of Exxon, Hess and CNOOC – in the exploration, but has no seat at the table, and no say in decision making. And guess what? The Government cannot extract in return, a single change in the concessions available to the oil companies.”
Ram, in a brief telephone interview with the Kaieteur News, said that this is not how the Petroleum Agreement should operate and constitutes another form of renegotiation of the 2016 Agreement, once again in favour of Exxon.
The Chartered Accountant added, “I am not sure that (former Natural Resources Minister) Raphael Trotman and (the current Natural Resources Minister) Vickram Bharrat were alert to this, but Vice-President, (Bharrat) Jagdeo must hopefully understand the implications of the practice, beyond its superficiality.” If he does understand this but allows it to happen, Ram said it could indicate a reckless disregard for the consequences or a lack of concern for the nation’s financial well-being.
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Weekend Cartoon
Christopher Ram,
Needs to have his fact checker. He wilfully and blatantly continues to perpetuate lies and disinformation to the Guyanese people. Beware of wolves in sheep’s clothing.
He is an old and sour puss that will go to his grave with a restless soul.