Dear Editor,
While our Government does not consider it appropriate at this time to share with Guyanese any information on the Gas-to–Energy project, Mr. Winston Brassington, head of its Task Force for the project, disclosed at the recently concluded Guyana Energy Conference, that Guyana’s payment to the Exxon coventurers for its US$1 billion investment in the pipeline will be US$55 million per annum over a 20-year period. This comes up to US$1.1b.
Having disclosed the investment however, Mr. Brassington went on to offer some overelaborate, technical explanation which confused more than explained. For example, he is quoted in the media as showing that “they” came up with the US$55 million by “convert[ing] to a unit price per gas, calculated at 50 MMCFD [one million cubic feet per day] x $2.40 for MMBTU [one million British thermal units] x 365 [number of days in a year] x 1.26 [conversion factor of MMBTU to MMCFD].” Wow!
What Exxon will deliver is at best only tangentially relevant to what their investment actually cost.
While the Government waits for the appropriate time to share information, it also tells us that Exxon will recover the money as cost oil under the 2016 Agreement. We are left to guess whether Exxon will be allowed to claim only US$55 Mn. per annum as recoverable cost and if that amount is factored into the cost ceiling of 75%. Mr. Brassington cannot be unaware that the 2016 Petro-leum Agreement expressly provides for production sharing on a 50 – 50 basis of Profit Gas (Article 11 of the Agreement), and for the “friendly negotiations” where Exxon believes that improved terms are necessary (Article 12) and that the Agreement dedicates a whole Article 13 to the valuation of Natural Gas (Article 13)?
I must be cynical. Does the Government not wish Guyanese to know that it submitted itself to Exxon on [re]negotiation of the Gas terms of the Agreement but was unwilling or unable to have Exxon [re]negotiate on royalty and taxes?
But there was another bit of information offered by Brassington that reeked of brazenness. He announced that that $400 million has been set aside for land compensation to owners of approximately 75 acres of land which has been compulsorily acquired by the Government for the gas works. That works out at an insulting figure of G$5.3 Mn. per acre. This is further evidence of the deference if not obsequiousness, with which the Government treats Exxon and contrasts with the insult it demonstrates towards Guyanese landowners, including presumably, many of its own supporters.
Our Constitution allows for compulsory acquisition of private property on the “prompt payment of adequate compensation.” The Govern-ment it seems ignores the meaning of the word “prompt” and understands “adequate” to mean what it tells one of its public servant to mean. It insists that landowners must accept less than 0.2% of what it is prepared to pay Exxon!
Oh, how our mentality has evolved!
Yours faithfully,
Christopher Ram
