Vote for leaders who will demand renegotiation of the oil contracts

Dear Editor,

Global Witness has revealed that Guyana stands to lose at least US$55 billion from the current 7.9 billion barrels in the Stabroek Block. The major political parties have not indicated that they will renegotiate the atrocious Stabroek oil contract. But the Guyanese people have other choices. Leaders of both the Change Guyana party and the Liberty and Justice Party have stated their parties will seek to renegotiate the oil contracts.

Global Witness has made public all the details of how the US$55 billion number was computed. The government has tried to control the narrative by touting a secret report from Rystad. Rystad estimates that Guyana’s take from the oil project is 60%. But how can Guyana get 60% share of revenue when profit sharing is split evenly? This shows the government lacks understanding of basic math and the ability to employ reasoning.

What does it mean to give up US$55 billion? It is about US$70,000 for each of the 780,000 people living in Guyana. For a family of four: that is a loss of US$280,000. Given that the average Guyanese earns US$4,000 a year, it would take such a family with a sole breadwinner about 70 years to make that money. If a labourer starts working in his teenage years, that would mean he would need to work into his eighties cutting cane and milking cows full-time. How do you tell that labourer that it is not worth fighting for US$55 billion?

What about the more than 30% of poor Guyanese that live on US$2 a day. The average life expectancy of a Guyanese is 66 years. A poor Guyanese would need US$48,000 to survive during his/her life span. Splitting US$55 billion among the poor (30% of the population) would mean US$235,000 for each person. That is almost five times what they live on today.

Imagine if a financial analyst says to an electorate: “Hi Voter, would you like to increase your lifetime’s net worth by five times? Voter says, “Sure, what do I do?” And, the analyst says: “All you need to do is vote for renegotiation.”

Sounds too simple to be true. But it is true. And, Guyanese do have that choice on March 2nd.

Leaders of the Change Guyana and the Liberal and Justice parties have both made public declarations that they, if they win seats in the parliament, will demand renegotiation of the oil contracts.

Guyana needs leaders who understand the meaning of sovereignty, the value of their oil resource – and the importance of hiring a team of knowledgeable personnel – to negotiate with the oil giants like ExxonMobil. Not leaders who are worried about controlling the narrative of the great oil debate being played out daily in the independent press. Here are few points to consider with regard to the Stabroek Oil Contract:

- What good deal? The 2% royalty and 12.5% profit share works out to much less than 14.5% of barrels recovered after accounting for expenses such as shipping and marketing. Not to mention, the contract says ‘produced and sold’ not produced for the profit sharing. This is a bad deal.

- Cost Recovery (up to 75% of revenues). There is no ring fencing thus the oil companies can keep the expenses at 75% as long as they desire. Thus any projections that the expenses will fall and government’s share will rise is questionable.

- The government of Guyana produces a tax receipt when no tax is paid. The government issues tax receipts to the oil companies but they have paid none. The oil companies will use this tax receipt to receive a deduction in their home country. This rings of fraud.

- Stabilization clause. The government can never update the terms of the contract to correct any of the issues mentioned above. This is a humiliation of the Guyanese people.

The chairman of the Change Guyana party, Nigel Hinds, is a CPA. A certified accountant is another way of saying someone understands numbers. The leader of the Liberty and Justice Party, Lenox Shuman, worked as a pilot at one of the major airlines in Canada. Mr Shuman doesn’t get to be a pilot at one of the safest airlines in the world without understanding the life and death meaning of numbers. He needs to be constantly aware of elevation and determining how much fuel is needed to reach a destination. We, members of OGGN, recommend that Guyanese voters on March 2nd choose leaders who support the call for renegotiation of the oil contracts based on numbers and logic. Not leaders interested only in defending an unfair contract – and now forced to peddle a false narrative.

Yours faithfully,

Darshanand Khusial, M.Eng Mike Persaud, MBA

Charles Sugrim, CPA

worded manifestos and return to living a detached life permitted and afforded to them by the system of governance which exists in the present political system of many countries. This system allows for the formation of dictators. Current dictators worldwide use the military and police to fortify themselves and to allow them to continue to abuse in a wanton fashion. They obtain infantile blind loyalty to the party to continue to inflict great wrong on the people. They justify greed, lavish spending, mismanagement and financial abuse by absolute denial of their wrongdoings. They fortify their self-righteousness by the adulation they receive from their families and loyalists who benefit while the large majority struggle. They are not bothered much by the opposition for they are in the minority. We have the opportunity for ensuring that abuse of our country’s wealth does not occur any more. Financial mismanagement by any government should be stopped by the permanent secretaries, who are the administrators and financial managers of the ministries. As we move forward to electing a new government, I wish to see that the party which wins on polling day ensures that accountability becomes the standard for governance. It is important that the elected official fulfills his duty for the main function of the office of government. That is, the development of good policies to safeguard and benefit all Guyanese. This can be done by ensuring that the permanent secretaries are able to do the job of their office without interference by the minister. The permanent secretaries are the administrative heads of the various departments of government and are responsible for their financial management. As stated in the Journal of Public Administration and Governance 2161-7104 2014, Vol. 4, No. 1, “It is not the minister for the department who is the administrative head. It is the permanent secretary who has the great responsibility for managing the minister and ensuring that guidance and support is given to the minister even if the minister has a different political philosophy from the permanent secretary”.

In government, there is no longer party politics. Permanent secretaries must find the courage to protect the finances of the country for the people and not be party to the abuse of our nation’s wealth by greedy politicians. Ministers of government cannot move out permanent secretaries from their ministry because of personal feelings.

The critical and valuable role of the permanent secretary is well described by Dr Donald M. McCartney of the Bahamas, who states that the permanent secretary is the administrative head and is permanent. The relationship of the permanent secretary to the minister is also described in the reports of the Parliamentary Select Committee in the United Kingdom: “The permanent secretary should record in writing their dissent when their ministers are spending funds for purposes other than those for which they were voted for by Parliament. Officials must be willing to tell ministers things the latter do not wish to hear. They must confront ministers with problem not just bring them solutions. The official relationship with the ministers is emphatically not one of passive obedience; and ministers are expected to give more attention to the advice of the secretary.”

Jamaica, to its credit, ensures political non-interference with the permanent secretary while recognising that the permanent secretary has a reporting role to parliament and must support the technical heads of department. Supervision and authority over the permanent secretary is not by the minister of government but by the Cabinet Secretary. As a CARICOM member, the practice should be the same in Guyana.

However, permanent secretaries were reassigned by the minister of state in March 2017 and in May 2019, the president announced a reshuffling of permanent secretaries. From the description of the role of the permanent secretaries, it appears to me that neither the president nor his ministers have the right to reshuffle or appoint without the recommendation originating from the Public Service Commission and the Cabinet Secretary. No matter how powerful a head of state or government minister feels, he or she must be managed by the permanent secretary and not vice versa. It is the permanent secretary who must answer to the blunders of the ministers.

As such, permanent secretaries need to meet without the presence of a minister, to plan for their vital role of being able to function without political interference. This is needed for strengthening their roles for the protection of the finances of the people of Guyana. They need to advise their ministers of their primary role, which is not to micromanage the ministry but to be available to their electorate to address their social concerns and be on top of negotiations with the many persons seeking to benefit from Guyana.

Yours faithfully

Dr Davendra Sharma

Professor of Behaviour Sciences