This past week, the Vice President took the opportunity to correct misinformation that is being spread by a handful of persons, who would rather Guyana lose out on the benefits it is presently extracting from the bad deal signed with EXXON. Two things Guyanese must be aware of: first, Guyana gets more than EXXON after expenses have been discounted. Second, the Irfaan Ali-led PPP Government has totally rejected any attempt by EXXON to discount the 2% royalty Guyana gets from total revenues as an expense. On the second matter, Guyanese ought to know that the deal the PNC/APNU/AFC signed with EXXON provided them with an opportunity to discount the 2% royalty as an expense. The PPP has refused to permit such an absurd giveaway.
VP Bharrat Jagdeo, once again this past week, had to repeat the truth about how profits are shared between Guyana and EXXON. Guyana gets upfront 2% of the total sales of oil. Of the 25% of sales that are considered as profits in the early years, Guyana gets 12.5% and EXXON gets 12.5%. EXXON gets to claim up to 75% as recovering its expenses and investments. After EXXON would have recovered its investment, and expenses do not exceed 75%, overall profits will increase and Guyana will share the increased profits equally with EXXON. This means that in the early years, Guyana’s share of total revenue is a minimum of 14.5% to EXXON’s maximum of 12.5%. Guyana must be vigilant in examining the expenditure claims on 75% of the revenues, to ensure that EXXON is claiming legitimate expenses. In this regard, Government has signed a contract with a consortium of local and international auditors, to ensure that EXXON’s claims are eligible expenses.
Even as some in Guyana continue to peddle misinformation, the VP has been regularly trying to make Guyanese and the world aware of the truth. Take this particular misinformation that some in the newspapers blare, especially in one newspaper that blares misinformation and half-truths daily, that EXXON is allowed to recover the 2% royalty Guyana gets as an expense in the 75% claim from total revenues. Vice President Bharrat Jagdeo had made clear that the Irfaan Ali-led Government is not prepared to permit EXXON to recover the revenue that Guyana earns as part of its expenses, but some of the anti-OIL sycophants keep repeating that claim with the hope that the Guyanese people would join them in their anti-OIL campaign. The Director General of the Guyana Revenue Authority had to step in this week to confirm that the GRA and Guyana have not allowed EXXON to claim the 2% royalty that Guyana receives as an OIL cost. In spite of these categoric explanations to dispel the misinformation, those who have been repeating the misinformation have totally ignored the explanations from the VP and from the GRA.
So as to clear all doubts, Guyanese have become united that Guyana got suckered when we legally signed the EXXON deal. The PPP said so in Opposition, and the PPP has maintained that posture. Since the PNC/APNU/AFC, in recent times, now claim they want to renegotiate the deal they made with EXXON, we have to assume that they are in unity with the rest of us: that the David Granger APNU/AFC Government signed a bad deal with EXXON. But bad dal or not, it is a legal contract, and Guyana is obliged to act within the contract provisions.
Guyana had, and has, three choices – act as APNU/AFC intended to, and allow EXXON to exploit the situation maximally; try to ensure that as a country we seek every opportunity to maximise our take from the existing deal; or renegotiate. The renegotiation will put Guyana squarely in confrontation with international law, and will bring calamity upon us. Guyana’s most practical option is to find every avenue to maximise our take from OIL revenues. This is what the Irfaan Ali Government is doing.
The truth is that, in the small anti-OIL grouping, all those who today demand the EXXON OIL deal be renegotiated or arbitrarily scrapped knew the deal was bad when the Granger Government signed the deal. Outside of some timid criticism by less than a handful of them then, none of the recent anti-OIL advocates ever mounted a robust opposition to the deal. They only discovered their disgust with the deal since the PPP Government assumed office, even though it is the PPP that has taken a bad deal and is trying to extract the maximum benefits from it.
Take the provision in the contract that APNU/AFC signed with EXXON, that provided an opportunity for EXXON to claim the 2% royalty to Guyana as a business expense. The small anti-OIL group keeps repeating this as if the PPP is allowing it. The PPP Government, in fact, has closed that loophole. But those who were silent when such absurd giveaways to EXXON were made today behave as if it is Vice President Bharrat Jagdeo’s fault, as if it is a malfeasance by the Irfaan Ali-led Government.
The truth is that the very robust critics today were silent when the PNC signed off the agreement, and today they are trying to mobilise Guyanese with misinformation against the PPP Government. It is one of two things – these critics hate the PPP, or they today enjoy the freedom that democracy brings, as opposed to the fear they lived in under Granger and the APNU/AFC Government.