On Friday last the New York Times published “The $20 Billion Question for Guyana.” It was a lengthy review of Guyana and the impact that the oil discovery by Exxon and its partners in offshore Guyana is likely to have. Two recent articles by the Wall Street Journal and Foreign Affairs, of world-wide reputation, like the New York Times (NYT), were published and reprinted in Guyana. Few Guyanese would recognize the description of Georgetown by one of them as ‘sleepy’ or by the NYT as a ‘musty clapboard town…which seems forgotten by time.’ Notwithstanding these unflattering first impressions of Georgetown by foreign journalists, the articles helped to highlight, not only the amount of financial resources that will become available to Guyana, but how those resources can be used or misused.
Guyana is described as an unlikely setting for the next oil boom. It is ‘one of the poorest countries in South America can become one of the wealthiest.’ The NYT article said that all the talk in Georgetown is about a sovereign wealth fund to manage the money. It underlined Minister Raphael Trotman’s comment, perhaps speaking hyperbolically, if he indeed said so, that we have been given a chance to get things right because ‘the Chinese cut down our forests and dug out our gold and we never got a cent…we could end up with the same experience with ExxonMobil.’ Whatever the dangers, Rystad Energy is quoted as predicting that Guyana will get $6 Billion by the end of the 2020s. But this is a modest estimate with a production of eventually 500,000 barrels a day. Doug McGhee, Exxon Operations Manager, predicted better social services and infrastructure, ‘if the government manages the resources right.’
The total electoral devastation of the Democratic Labour Party(DLP) and the political exit door shown to former Prime Minister, Freundel Stuart, by the Barbados electorate at the elections last Thursday, is an apt and decisive answer to the vicious attack Stuart made on the Caribbean Court of Justice earlier in the week, when referring to the judges derogatorily as ‘politicians in robes.’ It is not unusual for politicians to be peeved by court decisions. Guyanese politicians have expressed ‘concern’ about issues relating to the CCJ on several occasions in the past, including the recent past.
In the UK, the developed country from which we inherited our laws and jurisprudence, and whose precedents are the most influential in the CCJ, judges and courts are regularly criticized, as they should be. But Stuart did not merely criticize; he unjustifiably attacked the CCJ for political bias and undertook to withdraw from the Court. Had he won the elections, Barbados’s withdrawal would have dealt a crushing blow to Caribbean unity and, worse, would have weakenedCaribbean jurisprudence and the rule of law in the region.
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.
Minister Khemraj Ramjattan, of “Hall Yuh Ass” fame, responded to my article last Sunday, entitled, “To preserve itself, the AFC must resign from the Government,” with the following epithets – “nonsensical;” “vacuous chatter;” “idiotic;” “we are not going to block [the] chatterati;” “foolish;” “Ralph kept his mouth shut then he got shelved now he is talking plenty;” “if he wants to be a politician he should go form a party then know what it is;” “these fellas love to talk from a distance like parrot, you know parrot telling donkey how to bat but stays up in the tree, they want to stay up in the tree and not do the batting themselves, you write exactly what I say there.” Sadly, by succumbing to the temptation of the politics of abuse, Mr. Ramjattan exposes the inability of the AFC to answer serious questions about its political posture.
Would you believe that this was the same Khemraj Ramjattan who embraced me at the post 2015 election celebration at the Pegasus Hotel in congratulation for what he believed was my contribution to the victory of the APNU+AFC coalition? Well, he did. At the same event, Prime Minister Moses Nagamootoo thanked me in the presence of several persons. Now Minister Ramjattan is abusive and PM Nagamootoo uses the Chronicle to denigrate me.
The collapse of the Palmyra foundation structure intended to support an Indian Arrival Monument to be unveiled on Arrival day was reported by the Stabroek News on April 27. Stabroek News had interviewed a Mr. Marlon Cumberbatch who said he was the supervisor of the construction company. He couldn’t say what caused the collapse but suggested that the project needed to be redesigned. Mr. Cumberbatch stated that the construction company would be dissolved. Workers complained that they had not been paid and sources told Stabroek News that Mr. Cumberbatch was indeed the contractor. The choice of contractor, the design of the project, the reason for the collapse, all remain state secrets.
While not much has been announced, it appears that the government has embarked on policies to make the small man into a real man by opening up opportunities in construction and other areas. There have been complaints for a long time that Guyanese contractors of African descent were being discriminated against. Bringing a contractor from Linden to undertake a contract in the Corentyne, suggests that the policy of redress, and a lop-sided one at that, is in full swing.