Govt making wild, fake promises about oil – Jagdeo warns

A stern warning was issued to Guyanese, urging them not to fall prey to the ‘wild and fake promises’ being made by the A Partnership for National Unity/Alliance For Change coalition Government, especially as it relates to the impending oil and gas sector.
This warning was issued by former President and current Opposition Leader Bharrat Jagdeo who maintained on Thursday that Government has been ‘selling dreams’ to the Guyanese citizens and has attempted to paint false images of the benefits from oil in people’s minds.

The People’s Progressive Party (PPP) General Secretary shared this observation while addressing a media conference, as he noted that the Government needs to be straight with people.
“I suspect the reason why they are doing this, talking about this, is because they have one thing to sell remaining in Guyana. Their hope of a better future with oil money because that is what they are telling their supporters. So, magically in 2020 our lives would be transformed and we will all be wealthy,” he said.
Jagdeo said although Government is trying to oversell the benefits of oil, he maintained that the reality of the numbers does not support such a conclusion that things will be extremely easy.
He said, “For those who believe this wild promise and fake promise of APNU (A Partnership for National Unity), they will be sorely disappointed again in the future, if they buy into this. It’s not going to be a magical kingdom as they are making it to be, when oil comes in 2020.” The former Head of State said this is the only thing that the coalition Government can sell at this point, especially since they have failed on keeping their promise of being transparent and creating employment.

No analysis
Another important matter raised by Jagdeo, was the fact that Government is selling everything without proper analysis, when ExxonMobil is being extremely careful in the manner in which they provide information to the general public with regards to the oil sector. Using an example, Jagdeo referred to a public advertisement published by ExxonMobil which portrayed a graph and focused on the price for crude oil. In that advertisement, the company issued a disclaimer in fine print to explain that the information is just an average and may not be the actual number.
“So, ExxonMobil puts in a caution statement even on their own graph say they can’t be held accountable for what is here (advertisement) and that it is only for illustrative purposes. Yet our Government sells this (advertisement) as gospel that it is unchanged,” he explained.

Gaskin’s blunder
On that note, Jagdeo, an economist, said he wants the Government to state what Guyana will get is the price for oil falls to US$25 per barrel. He said most of the predictions are being made on the current price which is US$50 per barrel, but there is no guarantee that it will remain there.
“What if it falls to US$25? That is a real scenario, because that has happened for long periods in the past. How much money will we get then? So, they only look at the upside and the reason they are doing this…they said US$300 million is not chicken feed, but they only have one thing to sell.”
The Opposition Leader was also critical of recent statements made by Business Minister Dominic Gaskin who defended the contract signed between ExxonMobil and Government. While describing the Minister as lightweight, Jagdeo said his statement only confirmed the Government’s position that they are more concerned about how much money they could earn from this sector and nothing else.
“His statements confirm our view that this Government only looks at the governmental sector. How much revenue it can collect. So what he did, he pointed out how much money we will collect from ExxonMobil versus what we are collecting from the gold mining sector as revenue. He did not look at the impact of the gold mining sector on the lives of maybe 100,000 people,” he added.
Gaskin told a recent oil seminar that in the first year of oil production, Government could earn about the same that it has earned from the last eight years of gold production, claiming that more royalties could be accrued from oil as opposed to the gold sector, which at present is Guyana’s biggest export earner.
The Opposition has already made it clear its position that it does not feel that Guyana was properly represented by the current Government to get the best possible deal for its new found resource. The PPP has since called on Government to renegotiate the Production Sharing Agreement (PSA) with ExxonMobil in an effort to secure more for Guyana and its people in future years.
The Opposition has also expressed willingness to support any motion made by the coalition Government in the National Assembly to have the oil contract renegotiated with ExxonMobil. However, they have noted that they are not prepared to make the first move especially since they believe that it could be misconstrued that they want to undermine private investment in the country. Research conducted by the Oil and Gas Governance Network (OGGN), a group of financial analysts, accountants and economists, reveals that Guyana has sold its oil at US$29 billion below market value.