Trotman speaks to the Natural Resources Committee of the National Assembly
companies from any legislation passed by any Government having an adverse impact on Exxon.
Natural gas
Mr. Trotman boldly asserted to the Committee that “We have also included the clauses for the use of natural gas. The 1999 Agreement had nothing about natural gas.” I do not know whether to laugh or to weep for Mr. Trotman but how could he not know that the 1999 Agreement had as Article 12 - Associated and Non Associated Gas, the same title as the 2016
Agreement and that the two Agreements bear striking similarities?
Guyana’s earnings
Demonstrating the mathematical wizardry which underpinned the APNU+AFC’s definition of a majority, Trotman delved into some hyperbolic calculations directing the members of the Committee who have calculators to follow his maths. Using a base of 3.2 billion barrels of oil he asked them to multiply that number by 50% and then declaring that “it would be in the realms of US$300 billion and half of that is already coming into
Guyana. We are already going to be wealthy.” Here again, Trotman is displaying further evidence of his limitations which operate against the interests of the country. It is unclear from his convoluted maths whether he is assuming a price of US$200 per barrel or US$100 per barrel, the first of which is crazy and the second extremely optimistic. He completely ignores Cost Oil which includes annual operating, financial and other onshore costs as well as pre-contract and pre-production costs. Conservatively, for the first three to five years all Guyana might receive is 14.25% of gross revenues including royalties from the Esso contract.
It is true that Guyana will receive income from employment and withholding taxes that are not insubstantial. But against this has to be weighed the cost of regulating the sector by the Customs and Trade Administration, the Guyana Revenue Authority, financing the Department of Energy and the Environmental Protection Agency all of which can add up to several billion dollars annually. Trotman is no longer the Petroleum Minister and that is a good thing. Hopefully Dr. Mark Bynoe is better at maths and with facts.