Mr Hinds completely omitted the profit sharing component of the Esso deal

 Dear Editor,

Please allow me to comment on a letter appearing in your letter column (SN 2018.08.16) signed by Mr. Nigel Hinds.

In his letter Mr. Hinds speaks of  “… hollow and fantastical plans to give Guyanese from an unknown year US$1 Billion annually (250,000 households multiplied by US$5,000).”

Having put out this figure, he then attempts to compare it to his projections of what would be available to Government from oil revenues using the following argument: “Considering that US$1 Billion requires revenue of US$50 Billion, when selling 500,000 barrels per day in 2025 as projected by Exxon’s Esso, then computing at US$70 per barrel, using a 360-day year, Exxon’s Esso claims revenue subject to royalty less than or equal to US$12.6 Billion, on which the crumbly 2% royalty amounts to US$252 Million.” He then proceeds with an incoherent rant about the “ignoble 2% contract”.

At no point in his letter does Mr. Hinds mention the production sharing component of Government’s oil revenues which, using his scenario, would amount to somewhere in the vicinity of US$1.5 Billion. This amount would then have to be added to the US$252 Million royalty to arrive at the total Government revenues deriving directly from oil sales for that year. This would give a total of US$1.752 Billion.

Mr. Hinds would know this, and I can only assume that he has deliberately omitted Government’s share of production from his projections in order to strengthen his ongoing argument against the Petroleum Agreement between the Government of Guyana and Esso Exploration and Production Guyana Ltd. and its partners.

I have spoken with numerous Guyanese who are concerned about our country’s future and who believe that Guyanese people should benefit tangibly from the production of our country’s oil. I too share this belief.

Unfortunately most Guyanese have not read the Petroleum Agreement and therefore rely on the likes of Mr. Hinds and others who have been very vocal on this matter to shape their understanding.

By sharing two percent of the facts to shape public opinion, Mr. Hinds is in fact presenting a two percent argument. The public deserves a more complete picture.

Yours faithfully,

Dominic Gaskin

Minister of Business

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