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They say when a falsehood is repeated often enough it becomes fact. This is even more so when it is being repeated by the educated and well-known members of a society.
In Guyana the Exxon oil deal has and continues to be a huge bone of contention. And rightfully so. It represents the vehicle by which Guyana stands to gain billions of US dollars from a resource that just over six years ago, no one knew we had in these large commercial quantities. Every Guyanese has a right to ensure that we get the best deal possible and the most benefits from these resources so that not only us, but our children and children’s children, can benefit from a new Guyana.
Everything looks better in the rearview mirror. Looking back, particularly knowing what we know now, all would agree that Guyana would benefit more from a larger share of profits or higher royalty. Truth is, even as late as 2016, after the first discovery, we still had no idea how large the reservoirs were and how many more discoveries were imminent. What we did know is the potential. But all of this comes against the backdrop of over 40 wells being drilled with no results in the years gone by. Exploring offshore was still risky and most companies did not have the appetite for such high risks. Even Shell, looking at the same data that led to the Liza-1 discovery, thought it was too risky and walked away just months before Exxon made the find.
The biggest misinformation out there though relates to exactly how much of the profit Guyana is getting. The fact is, Guyana is getting the largest share. The profits are split 50/50. Guyana gets 50% and the other 50% is split between Exxon, Hess and CNOOC. Guyana also gets 2% royalty off the top. The barrels of oil allocated to Exxon, Hess and CNOOC are currently more than what is allocated to Guyana because Exxon and its partners are recovering the investments that they are making in finding, drilling and producing the oil. Guyana and taxpayers are not required to invest a single cent upfront, so the country is not spending any money in this process. But we get half the profits after the expenses are cleared, plus that 2% royalty.
The Stabroek oil deal, even before Exxon, Hess and CNOOC’s investments are cleared off, is already delivering billions of Guyana dollars to the national coffers. This year’s budget is the first for which the government did not have to borrow money to finance. This is because some of the oil money will be used to fund infrastructure, social development and other projects.
Already, the government anticipates around one billion US dollars will be earned this year in oil revenue. That’s two hundred billion Guyana dollars. The oil and gas industry is also pushing major private investments from both local and international companies now setting up operations in Guyana. This will create more jobs and generate more tax revenue for the state. How we manage these billions is what matters most.