Oily…LOO

Looks like Sanction Man, the Leader of the Opposition (LOO), fancies himself as an oil economist – in addition to a gold smuggler, if the US Office of Foreign Assets Control (OFAC) and our Guyana Revenue Authority (GRA) are to be believed!! Following ExxonMobil’s announcement that it’s recovered the roughly US$55 billion invested in our Stabroek Block, like Chicken Little, he shrieked that our oil income’s about to “TRIPLE!!!” Imagine the bigger cash grants we’d be getting, he hints – wink, wink!!
It’s an attractive proposition – almost as attractive as believing that once you’ve paid off your house mortgage you ain’t never gonna spend money on it no mo!! The Stabroek PSA does indeed permit up to 75 per cent of production to be used for cost recovery – with the remaining (25 per cent) profit oil split 50/50 between us and the smooth operators!! Plus, that dinky two per cent bonus, of course!!
But there’s a rather inconvenient little detail in the petroleum business that Sanction Man avoided mentioning – that the US$55 billion ain’t the last dollar Exxon gonna ever spend!! Probably ‘cause in his gold business, numbers mean whatever he wants them to mean!! Exxon might’ve recovered the accumulated costs of discovering and developing the existing production, but they haven’t acquired a magic oilfield that gushes oil for free!!
New wells – being pursued fast and furiously!! – cost money; as do new subsea infrastructure, FPSO modifications, etc!! Not to mention drilling, maintenance, transportation, insurance, staffing, and other operating expenses!! And these expenses gotta be deducted from the cost of oil!! With all else being equal, a larger proportion of future production can become profit oil – but it ain’t gonna be as large as Sanction Man wants us to believe!!
Ironically, while the Opposition complains that Exxon’s recovering too much as cost oil through the 75 per cent ceiling, now that the accumulated investment’s finally been recovered, Sanction Man should understand the other side of the same equation: cost recovery doesn’t disappear ‘cause yesterday’s costs have been recovered!! The oil industry has no “paid in full” sticker!!
Wells keep getting drilled; machines keep grinding to a halt; FPSOs keep requiring maintenance. And the next billion-dollar development, like Longtail, has still gotta be factored in! All cost money!! So, while the good news is that we should certainly expect substantially larger revenue flows, claiming that our country’s income is simply gonna triple is less an oil-economics forecast than an exercise in political wishful thinking!! Or political gamesmanship!!
If Sanction Man wants to announce a tripling of Guyana’s oil revenue, he should first produce the spreadsheet – and not from his back pocket!! Let him start with a column headed “New Costs”, ‘cause in the petroleum business, unlike in political speeches and gold smuggling, yesterday’s investment being recovered doesn’t mean tomorrow’s investment is free!!
Less shooting from the hip!!

…Brits’ departure
India’s independence anniversary is tomorrow – August 15!!! We can’t ever forget the demonstrator effect it had in 1947 – not only here in British Guiana, but across the world – especially in Africa!! Their achievement spurred on local politicians across the British Empire to raise their game – since independence had moved from a dream and aspiration to reality!! Burnham chose the name “Congress” for his new PNC party in 1957 – the year Ghana under Nkrumah got independence – much as South Africa had launched their Congress in 1912 in imitation of the Indian Congress!!
But we can’t live in the past, can we?? So, the question in this world of the supremacy of national self-interest – what’s India done for us recently?? Well, the answer is PLENTY!! Not the least being the fact that the moment they were informed that our ferry service to the Northwest depended on an eight-decade-old ship, they provided funding for, and built, a replacement – the MV Ma Lisha!!
Over now to the Transport and Harbours Department!!

…Suriname
Can you believe the nerve of Suriname to say they’d suspend the Canawaima service across the Corentyne because of its poor maintenance!! Turns out they’re the ones responsible for the said maintenance!!
We gotta put a stop to this eye-pass!