Dear Editor,
There is much excitement around the wealth to be had in the oil industry. However, if we take a closer look at the numbers it could be less income for those who had been working in the sugar industry and could range from approximately 640 to 9600 Guyanese dollars per day depending on the life of the contract, with the most probable outcome being approximately 3200 Guyanese dollars per day for each household given the following assumptions:
10 Billion Barrels discovered
Price range in US$ of $18 to $120
2% of revenue
15% of revenue is operating income (positive assumption on historical data)
50% split of operating income between partners
50% of the resulting national income goes to the government for renewable energy projects, oil spill resolution and safe closure of wells at the end of the project
An industry life of 20 years to 60 years
A population of 1 million people
A household size of 4 people
Exchange rate of G $200 to US$1
50 weeks in a year
5 days in a week
Given this possible outcome and the level of risk involved, the population of Guyana needs to resolve two important issues:
1) If we are willing to stick with the current contract that has been outlined with Exxon. Knowing that if renegotiated the possible wealth of the nation will increase significantly.
2) We should be approaching the United Nations with what the value of the oil in the ground is worth, and a decision needs to be made as to what price the world (especially those signed onto the climate mitigation plan via the Kyoto Protocol) is willing to pay to maintain the strength of the Guyana Shield and to reduce the risk of furthering the negative impact on the Earth’s climate. A balance must be found as we are a Third World country, under sea level on the coast by the Atlantic Ocean and the adverse effects of climate change have started to impact us. As a good world citizen and assuming that the world after witnessing the destructive negative effects of climate change is more willing to ensure that we all work together to prevent further destruction, it is my hope that the United Nations will be willing to support Guyana’s growth in such a way that our oil may remain in the ground while our economy and people may still benefit from its value.
As for the oil oligarchs, they too should be interested in reducing the supply of oil on the world market thus ensuring a higher price for the commodity while also helping to curtail its usage and negative impact on the environment. This would be a win-win outcome for the Earth, as all nations increase their usage of renewable, sustainable and environmentally friendly energy sources.
Best regards,
Jamil Changlee
