Dear Editor,
On May 17th, 2018 the Stabroek News published a letter by Mr Clement Smith in which he questioned the motives of A Fair Deal for Guyana with respect to challenging the oil contract. In that letter he stated, “But the saddest part of all is that local activists are getting involved.” We disagree with Mr Smith’s comment. The local press and the international press have pointed out numerous flaws in the oil contract. Even the government commissioned IMF Report has criticized the oil contract. There are many recommendations in the IMF report including one called, “Strengthen capacity to manage and mitigate environmental risks”. Isn’t Ms Janki being a patriot by helping with this recommendation?
Today, the price of oil hit US$80. Currently, the oil reserves are estimated at 3.2 billion barrels. At US$80 that is worth US$256 billion dollars. A few months ago, OGGN performed a calculation that showed that Guyana gave up an extra US$29 billion dollars versus what Exxon has historically accepted as a reasonable return on its investment. The chart below takes data from the IMF report that was performed for 450 million barrels at US$50 and extrapolates it to 3.2 billion barrels at US$80. The dollar amount in the third to last line should be zero as it used a NPV calculation based on what Exxon has historically accepted. But in Guyana’s case it is US$29 billion.
Giving up US$29 billion will cost the average family US$150,000. This is significant because the average worker makes US$4000. You can read our detailed analysis in the link below. Exxon and its partners are still exploring and the price of oil may rise even further by 2020. Hence, much more than US$29 billion may be at stake. We need many more local activists engaged because the stakes for the Guyanese people are life changing.
http://www.oggn.website/2018/01/29/
guyana-loses-out-on-us29-billion-from-oil-deal/
Yours faithfully,
Darsh Khusial
on behalf of OGGN