Dear Editor,
Any contracts pertaining to exploiting natural resources ‒ millions of acres of forest lands, oil and gold ‒ should be negotiated by the executive branch of government, and then the agreement should be presented to parliament for ratification, without which it should not be implemented. Former president Jagdeo has called on the government to make public the contract with ExxonMobil. President Granger should do so without further delay.
In the old days, presidents and PMs literally sold out the rights of their nation’s patrimony to foreign companies. Suharto of Indonesia sold out his country’s natural resources to foreign companies. Today the people of Indonesia are holding rallies outside the mines and calling on those foreign companies to pack up and leave Indonesia.
The contract with ExxonMobil that is currently being negotiated and finalized should not become law until it is ratified by the parliament.
Minister Trotman has mentioned oil reserves of 800 million barrels (maybe this is for one field). At an estimated price of $50 per barrel, Guyana’s share of 400 million barrels should yield a gross of $20 billion. (Of course exploratory and operating costs must be deducted.) On this score alone, Guyana should continue to investigate the possibility of building its own refinery. Why? Oil prices have fluctuated wildly ($48-$147 within the last 6 years), but gasoline prices have not. The Canadian experience bears this out. Canada sells its crude, which gets shipped to Texas to be refined, and which comes back as gasoline. Meanwhile crude oil prices have declined from $80 to $50 a barrel (2014-2017), but there has been no comparable decline in gasoline prices.
The investment in a refinery can be rationalized on the added value alone that accrues to the benefit of the Guyanese economy, but there are other benefits: developing new skills for Guyanese workers, spinoffs of new service industries. It would bring a sense of industrialization and self-confidence to the Guyanese nation.
What does it cost to build a refinery? Is it $450 million or $5 billion? Do we need a refinery of 50,000 or 200,000 bpd capacity? While Mr Pedro Haas was discussing the pros and cons for a 100,000 bpd refinery costing $5 billion and then dismissing the proposal as not feasible, the internet has breaking news of several countries building refineries for $410-$500 million. Minister Trotman would do well to further research the proposal of building a refinery.
Yours faithfully,
Mike Persaud
