A senior political analyst attached to Americas Market Intelligence (AMI) says the recently released Global Witness report on Guyana is the NGO’s attempt at spreading its anti-oil ideology and urged Guyanese to do their own fact-checking and come to their own conclusions regarding the Production Sharing Agreement (PSA) with ExxonMobil, as they head to the polls for elections on March 2, 2020.
Remi Piet, a Senior Director at AMI and co-leader of the firm’s Natural Resources and Infrastructure Practice, leads political and other risk analysis activities for the mining, energy and infrastructure sectors in Latin America. His comments were included in an article he wrote on Caribbean News Global dated February 16, 2020 headlined: ‘Global witness report jeopardizes Guyana’s unlimited potential’.
The Global Witness report entitled ‘Signed Away: How Exxon’s Exploitative Deal Deprived Guyana of up to $55 Billion’ calls for investigations to be conducted on those responsible for signing the PSA with ExxonMobil.
The report said, inter alia, “Guyana is set to lose out on up to US$55 billion from the Stabroek license – an average of US$1.3 billion per year in a country with an annual budget of US$1.4 billion, according to a new analysis.” The report also called for a halt to future exploration and production offshore the South American country.
Piet however cautioned, “In what amounts to an ideologically motivated effort to halt oil exploration, the report’s recommendations could well put at risk billions of dollars in future revenues for the local population.”
He said preventing a resource dependency, fighting against corruption and developing infrastructure should be the main themes as voters head to the polls — “not a baseless report.” He said at the end of the day, “the Guyanese people have been awarded a blank canvas and only they will be allowed to paint the society they envision for generations to come.”
Piet said this is not the first time that Global Witness “misrepresented a situation in an effort to promote its anti-oil agenda.” He noted that the Government of Guyana along with Rystad Energy have debunked the report, which he said does not attempt to quantify the true value lost by a forced renegotiation of contracts. “Reopening negotiations could delay the production of oil and put hard-fought money at risk, jeopardizing the development of Guyanese society,” he said.
Piet is of the view that the recommendations of the Global Witness report could put indispensable reforms needed in Guyana in jeopardy.
“Global Witness also states that once the government obtains the hypothetical USD$55 billion, they should issue a moratorium on all new drilling procedures and cancel nine already allocated licenses. This would not only disrupt a cooperative relationship between Guyana and the IOCs but more importantly, it would also deprive Guyana of billions of dollars in additional revenues. This would put at risk the indispensable structural reforms needed in Guyana,” he said.
Government must prepare for oil
Piet said that government must put the relevant systems in place for the use of the oil money.
“In the following month, the local population should elect a government that can adequately manage its first oil revenues. This begins by having the new administration put forth a concrete plan with strict guidelines on how the money can and will be used to improve Guyana’s society. The plan must include education reform, training programs for the workforce, and the development of essential infrastructure such as the reconstruction of Guyana’s sea wall,” he said.
He urged the government not to lose sight on the wellbeing of the Guyanese people as they receive up to $5 billion annually during the next decade.
“The country is still one of the poorest in the region, with the 8th lowest GDP per-capita at USD$5,252 and 14 percent of the population living with less than USD$1.90 a day. In order to turn this around, Guyana needs level-minded government officials that implement a proper fiscal regime to manage the newfound revenues,” he stated.
“The government will also require constant cooperation with IOCs and multi-lateral institutions to ensure job opportunities, transparency, and accountability. The IOCs should continue to offer specialized training to the local people while developing an oil contingency plan that protects against environmental damage,” he pointed out.
Multilateral institutions, such as the European Union, IMF and the Organization of American States (OAS) can provide independent accountability that ensures free elections and prevents the mismanagement of funds, Piet said.
