Focused action needed now for a 10% royalty from Exxon/Esso

Dear Editor, Guyana agrees to pay Exxon’s Esso – a US$460 Million Bonus, and labels it precontract costs, which is 2,500% higher than US$18 Million that was received by the Government of Guyana and referenced as a “Signing Bonus.” The reference is a misnomer to the extremities of accounting classification – Copper Signing Bonus is a more apt term. A neutral observer would consider the US$460 Million giveaway that was written into the 2016 Petroleum Agreement as unparalleled and unimaginable fiction.

If you have circles of varied sizes, only the area changes not the shape. Exxon’s Esso has managed to make a contract into a farcical, unconscionable and illegal contract, while maintaining it is a binding contract. Guyana’s compliant representatives embraced and continue to genuflect and kowtow to this folly.

The abusive, farcical, illegal and unconscionable Petroleum Agreement must be renegotiated for a 10% Royalty. The neutral observer would consider renegotiation the common-sense option – as many objective commenters have asked time and time again in the media for action from our “Good and Green Government”; nothing of substance has been initiated. Our leaders are too unprepared to even publish a policy paper on what are the attributes, goals, benefits and economic, technological and social benefits of the Green Economy. Aside from Green being the colour of the ruling party and making for a good narrative and subliminal advertisements, during election campaigns, the Green Economy takes a pit seat to the Esso Oil Economy for Guyana.

The 2016 Guyana/Esso Petroleum Agreement is injurious to logic, reason and common sense; obviously it does not compare favourably to any other oil agreement signed over the last 150 years; that’s since the petroleum industry was birthed in Titusville, Pennsylvania, USA; after the first oil well was drilled in the United States of America.

At the current oil price of US$65 per barrel; five Billion barrels has a value of US$325 Billion or GY$68.25 Trillion. A huge lot of loyalty can be bought; and trust betrayed for extremely small fractions of the value of Guyana’s oil. The mantra of our representatives seems to fit with the Oscar Wilde statement: “Resist everything except temptation”.

Guyana is now dubbed a “frontier” country; don’t be misled, it means small and undeveloped by those who coined the term. Yet, developed mega corporations from so called “developed countries” are lining up in droves to access resources in the “frontier countries. Don’t expect any of the first world expert analysts to question the absurdity of the 2% Royalty or to ask for an explanation of the farcical US$460 Million claim that was thrust into the 2016 Petroleum agreement and by extension upon Guyana.

Socrates the Greek Philosopher was noted as saying: “I tell you that virtue comes not from money but from virtue comes both money and all other good things for mankind”.

Let us start the renegotiation process now to change this dinosauristic Esso/Guyana Petroleum Agreement.

In a Walter Rodney-like admixture: Guyanese need to picture Esso in their own minds, as a representative of Exxon Mobil, the largest publicly traded multinational oil and gas company in the world, crouched over Guyana’s oil assets, currently worth US$325 Billion; and under the cover of a 2016 Petroleum Agreement from Hell; dictating that Guyanese will only receive US$6.5 Billion in Royalties, less delivery costs.

Guyanese must resist unceasingly, in a brave, courageous and united manner, this reprehensible 2016 Petroleum Agreement, until it is changed to allow Guyanese a fair share of what belongs to us.

I ask our informed commentators not to be side-tracked by issues forty years into the future, transfer pricing, ring fencing of taxes and tax concessions. The focused action needed now is to have a decent Royalty of at least 10% and the absolute rejection of the US$460 Million seditious clause in the 2016 Petroleum Agreement. Yours faithfully, Nigel Hinds