THE $20 BILLION QUESTION FOR GUYANA


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.’

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DEMOCRACY AND JUSTICE PREVAIL NOW FOR THE THIRD PARTY


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).

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‘SILENTIUM’


When I read the headlines in SN yesterday morning, ‘AFC says constitutional reform still a priority,’ I could not feel a sense of elation. Instead, I sunk into a dejected mood of déjà vu. The headline itself subtly editorialized that it was not impressed with the promise. It added to the main banner ‘though no progress over three years.’ I believe that the AFC earnestly wishes to have constitutional reform but is faced with implacable resistance in the form of inactivity by APNU.

But more importantly, constitutional reform for the AFC, as well as for APNU, whenever it desultorily renews its fading undertaking, no longer seems to mean what it promised in the coalition’s manifesto. By omitting to refer to the manifesto promises, it appears that constitutional reform is being treated as a box to tick before the next elections comes along. It can then boast of fulfilling its election promise.

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500,000 Barrels A Day.


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.

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GUYANA NEEDS A NEW POLITICAL PARTY


There are frequent, frustrated, refrains from observers that it is Guyana’s political parties that are mainly responsible for promoting the culture of ethnic dominance and without it, Guyana’s politics would not be dominated by race and instability. This is not true. Guyana’s main political parties reflect the social, economic and political aspirations of the people of Guyana. The fundamental feature of Guyana which determines these aspirations is its ethnic composition and history. This has been characterized mainly by separate struggles against employers and the colonial state for survival. The lesson that has been learnt is that whoever controls the state controls the distribution of its limited resources. The struggle for control of the state was a natural outcome of the nature of our main political parties and their fundamental, though unspoken political objective – ethno-political dominance.

By the time the first popular political party, the Peoples’ Progressive Party (PPP), emerged, it was recognized that ethno-political dominance, which had already reared its head after the second world war, was a negative phenomenon that will hinder Guyana’s political development and its main objective of Independence from Britain. The PPP was therefore organized with a multi-ethnic, multi-class, leadership. It attracted widespread support. However, as is well known, colonialist intrigues and internal opportunism led to what was in effect a departure of the “moderate” faction of the PPP. That faction later became the African led Peoples’ National Congress (PNC) which got its support mainly from the African Guyanese workers and farmers. Its merger shortly after with the United Democratic Party (UDP) brought support from mixed Guyanese and African middle class. Indian Guyanese gave their support to the PPP.

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