Latest update November 14th, 2024 8:42 PM
Mar 04, 2024 News
Kaieteur News – The Government of Guyana is gambling away the nation’s oil profits by refusing to ring-fence the Stabroek Block projects, former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams has said.
The Petroleum and Environmental Engineer during an Alliance For Change (AFC) press conference on Friday last argued that the government is ignoring the volatility of oil prices in its decision to not ring-fence the Stabroek Block projects, but conveniently uses the same argument to deny teachers a salary increase.
A ring-fencing provision would prevent oil giant, ExxonMobil from utilising the profits generated at one project to pay for costs at another. This key clause would ensure that the country receives 50% of all revenues each month, after the oil company recovers its investment. In the absence of ring-fencing, Exxon uses the resources that should come to Guyana to pay for other expenses across the block, thereby reducing the profits deposited to the Natural Resource Fund (NRF).
Vice President Bharrat Jagdeo who oversees the oil and gas sector had previously explained the reason behind government’s decision not to ring-fence the projects. He said this is to ensure investments are not stymied and will ensure massive revenues to the country in the future, after costs have been repaid. “We admitted that we are foregoing revenue now in exchange for massive future income because it’s going into new projects that will increase production, and so even with the same share of the 50/50, plus the two percent royalty that the future income, because of the bigger scale will be massive in Guyana’s case and we are deliberately foregoing that in this period for that purpose and then trying to grab this bone now could cause you to lose all the bones, the bigger bones too in the future,” he had said.
Weighing in on this crucial decision, Dr. Adams said government is risking the country’s profits, since oil prices can potentially take a steep dive in the future, thereby diminishing revenues for Guyana and its people. He said: “This guy (Jagdeo) comes up with all sorts of excuses that he pulls out of wherever, but you know what he said about the teachers’ pay raises? He said it is not sustainable because we do not know what the oil prices are gonna be in the future, however, he is risking our money, the nation’s money for money to be received in the future without knowing what the oil prices will be, so he comes up with this stupid excuse, well we can’t raise teachers’ salary because I don’t know what oil prices are gonna be in the future.”
Dr. Adams said that the country’s oil wealth was being gambled away. He argued, “Why would I take money that I currently have, if my people are starving, and give it to Exxon so that they can use my money to invest and they are making the billions and trillions with my money, while I have my people starving?”
The former EPA head continued, “(they) giving it to Exxon for them to spend money like drunken sailors to invest while they make money off of it…then you coming to tell me just to give the teachers a little paltry raise its not gonna be sustainable because you don’t know what oil prices will be? Well, that’s what you do with ring-fencing. You don’t know what oil prices will be later on when you start collecting whatever money you need to be collecting. Oil prices can go through the bottom by the time we are ready to, according to him, start getting our pay off on ring-fencing so it doesn’t make any sense.”
Nov 14, 2024
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