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Blame previous government for ExxonMobil-Guyana deal fiasco

January 03, 2021

The Guyana Times:

Today’s article is a direct response to Tom Sanzillo, a so-called financial expert, with the title “Director of Financial Analysis at the Institute for Energy Economics and Financial Analysis”, a seemingly globally unpopular institute. The institute appears to lack any credible, globally-respected reputational ranking with respect to the work it produces – hence the characterisation of it as a globally weak and unpopular institute. With this in mind, today’s piece is extremely necessary in the interest of public debate, since Tom Sanzillo, it would appear, is being utilised for whatever professional reputation he holds to lend credibility to a position of a certain section of society, which is given growing media coverage by a certain section of the media as well. To this end, there is a daily narrative – perhaps with good intent, but ignores many other crucial elements of the subject matter it seeks to champion, inter alia, Guyana’s oil deal.

Firstly, this author acknowledges that indeed the current Production Sharing Agreement (PSA) with Exxon is inherently weak in many areas, and could have been better. This author would have also, over the last three years since the PSA was released to the public, authored many pieces pointing out the weakness of the PSA. One must also acknowledge that the Government of the day has acknowledged this fact, and when it was in Opposition, did highlight many loopholes that could be corrected going forward with future contracts. However, it is not an entirely bad deal, where Guyana earns absolutely nothing, as it is being made to seem. Guyana’s net take from the current PSA is 14.5% which includes 2% royalty and 50% from profit oil. 

[J.C. Bhagwandin]

More: The analysis of Tom Sanzillo, Director of Financial Analysis at IEEFA, is fundamentally flawed, ill-informed, and contextually misleading (Part 1)

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