In an article published today by an online news agency titled: “Guyana does not owe Exxon a cent; nonsense passing off as analysis – the 2nd Vice President, Bharat Jagdeo posited that “The only debts that this country has to repay are debts contracted or guaranteed by the state, and I told you already that is only 16% of Gross Domestic Product (GDP). So, no debt contracted by Exxon or any of these companies is guaranteed, or we are party to. So, the citizens of this country do not have to pay.”
However, in an invited comment Economist Elson Low noted that the notion that the people of Guyana, individually and collectively do not owe ExxonMobil for its investments thus far, is misleading and a lie directed to that part of Jagdeo’s support base that is still asleep.
We do owe ExxonMobil for all costs expended and all costs it will expend over the next hours remaining for today. This includes all costs associated with meals and water provided to attendees of every consultation exercise in relation to environmental permits. Even the costs its employees will spend to cross the Demerara Harbour Bridge must be repaid by the citizens of Guyana.
The latest charge against the pockets of Guyanese relates to an April 4, 2022 decision by the US oil giant to invest USD$10 billion in the Yellowtail field offshore Guyana, in the Stabroek Block.
This sum is cost recoverable pursuant to Article 11 and Annex C to the Petroleum Agreement for the Stabroek Block. This agreement was first entered in 1999 by then President Janet Jagan. Discussions for a new and revised agreement commenced under the Presidency of Donald Ramotar, with faces like Robert Persaud being key.
Those discussions concluded in 2016 with the re-signing of the existing agreement. In 1999, Jagdeo was the finance minister, with responsibility for receiving and scrutinizing all license fee payments associated with the 1999 agreement.
Currently, Jagdeo has principal responsibility for the Ministry of Finance. He is assisted by Ashni Singh, the Minister within the Office of the President. The Ministry of Finance is tasked with auditing all expenses incurred by ExxonMobil. They are assisted by the Cost Recovery and Audit Unit within the Petroleum Department of the Guyana Revenue Authority.
The cost recovery team, which meets monthly at the Guyana Revenue Authority, reports directly to Vice President Jagdeo and Minister Ashni Singh, as to any discrepancy in bills produced by ExxonMobil. Discrepancies often arise because of ExxonMobil overstating or overpricing services or goods used in its operations. These bills are payable by the Guyanese people.
In May 2022, the Ministry of National Resources awarded a consortium of local businesses USD$700,000 to audit expenses incurred by ExxonMobil between 2018 to 2020 in relation to its operations here.
This audit process will reconcile claims by ExxonMobil as to what the people of Guyana owe the company shareholders, as opposed to what Guyana finds by way of audit as actually owing to the company. This contract was awarded after the Cabinet, to which Vice President Jagdeo is a member had given its approval.
Shadow Minister of Natural Resources, David Patterson weighing in on the issue, noted that this reality calls for wise spending of the monies from the Natural Resources Fund.
The member of Parliament, citing the recent IMF Report, called on the government to ensure that grants and cash bonuses are given to all Guyanese. He warned that such spending of the country’s oil monies must improve the lives of the people by ending poverty, addressing climate change issues such as flooding in the Mahaica/Mahaicony Region, creating industries and jobs in places like Wismar and Waramadong, and increasing public service out of town and traveling allowances, etc.
Recently, Jagdeo has embarked on aggressively sharing between $25,000 to $100,000 to certain sectors of the population without a policy approach. This is widely believed to be an old approach of Jagdeo’s PPP to buy votes.
More, In The Ring.
