During the lifetimes of Cheddi Jagan and Janet Jagan, the PPP twice, unanimously, decided to support a two-term presidential limit. A PPP delegation in 1995/6 proposed to the Parliamentary Select Committee on Constitutional Reform that the constitution should be amended to provide for a two-term presidential limit. In 1999/2000, the same representation was made by the PPP to the Constitution Reform Commission. These public proposals reflected those unanimous decisions.
During the Ramotar presidency, Attorney General Anil Nandlall opposed the application by Richardson to deem as unconstitutional the amendment to the constitution that limited the presidential terms to two. Before Mr. Ramotar became president, he had publicly opposed the call for scrapping the two-term limit. He has welcomed the decision of the Caribbean Court of Justice (CCJ).
With the production of 500,000 barrels a day for 300 days a year at US$40 a barrel, the annual income would be US$6 billion. The cost of production of oil varies widely, depending on whether it is onshore or offshore and if offshore, how far away and how deep. To give some idea North Sea oil was produced by BP in 2014 at US$30 a barrel. It went down to US$15 a barrel in 2017 and is expected to go down to US$12 a barrel by 2020. The estimated cost of production in offshore Guyana has not been made known by either the Government or ExxonMobil. We are therefore left to speculate.
Assuming that a maximum of about half of the income would be deducted as production costs, US$3 billion would be deducted as production costs from an annual income of US$6 billion. Guyana would earn 50 percent of the profit, that is, US$1.5 billion plus 2 percent of US$6 billion as royalty which would add another US$120 million. At minimum, therefore, Guyana’s economy would double. More likely than not, Guyana’s economy would grow to three times its current size and even more, if the price remains around US$60 per barrel and if more discoveries are made resulting in higher production. ExxonMobil has drilled only eight wells in seven of which oil was discovered. It plans to drill another twenty. There are also other blocks to be explored by other oil companies and other blocks yet to be given out for exploration.
The spectacular discoveries of oil in offshore Guyana, with promises of a glowing future, must be tempered with what that future really means and with the realities of today. It appears that Guyana stands to receive $US300 million a year for the first five years after production commences and a little over that sum for the twenty years thereafter. The size of Guyana’s economy is $US1.2 billion. This means that Guyana’s economy will increase by one-fifth as a result of oil revenue. This will be a significant boost but by no means a spectacular transformation. This figure is probably based on production of 100,000 barrels a day. It may well be that Exxon will produce far more than that amount for various economic reasons. While all of this is in the future, Guyana has pressing economic and political problems that require immediate solutions.
The dismissal of thousands of sugar workers will intensify poverty and crime across Guyana, particularly in the areas affected by the closures. Communities will deteriorate, drug taking and alcohol abuse will intensify and the economy will suffer from reduced spending. All of this will impact negatively on economic growth for 2018. By the time divestment concludes and some job opportunities emerge, the damage to the communities and their inhabitants would already have occurred. There is no immediate potential investment in Guyana’s economy on a scale large enough to absorb the dismissed sugar workers, or even a portion of them, that will make a difference to their dire situation. Any impact that a new oil industry may have is at least ten years away. By this time, an entire generation of workers and their children will be lost to productive labour by a decade of deprivation.
Political tensions in Guyana took a turn for the worst over the past two weeks. This has resulted from the appointment by President Granger of former Justice James Patterson as Chairman of the Elections Commission. Claiming that the third set of names contained no one who was fit and proper as required by the Constitution, the President, rejecting the names, utilized the constitutional proviso that enabled him to appoint a judge or former judge or a person qualified to be a judge.
Mr. James Patterson may not have been the President’s first choice. The appearance of Major General (ret’d) Joe Singh’s name among the final six gave some hope that the matter would be resolved without resort to the proviso. Those who know the retired Major-General suggest that he would not have allowed his name to go forward if there was any possibility that it would be rejected as not fit and proper. His sudden resignation from all government posts suggest that an undertaking, which may have been given to him, had been violated.
Very little debate has taken place on the Petroleum Commission of Guyana Bill. It is to the credit of the Georgetown Chamber of Commerce to have initiated a public discourse on the legislation around the country, albeit late in the day. The lead speaker has been former Energy Minister of Trinidad and Tobago, Kevin Ramnarine, who has tremendous expertise in many aspects of the oil industry and who has visited Guyana several times sharing his knowledge. He was ably assisted by Mr. Deodat Indar, the president of the Georgetown Chamber of Commerce, which has been invigorated in recent years by many young business leaders who are dedicated to its agenda of promoting business and commerce.
The business community is deeply interested in the Bill because it seeks to establish the institutions that will oversee the oil industry and to define the rules which would guide their functions and duties. Since it is likely that when passed, the Bill will impact the business community by providing opportunities for its growth and development for decades in the future, it is vital that not only business, but the people of Guyana, take an interest in what is being proposed to maximize the potential for Guyana.