West Indies Cricket Fans Forum
Exxon cheated Guyana on pre-contract costs – Christopher Ram says
Attorney-at-Law, chartered accountant and transparency advocate Christopher Ram, is of the position that ExxonMobil has cheated Guyana in millions of United States (US) dollars, claimed to have been spent by the oil major.
During his appearance on the Kaieteur Radio programme, The Glenn Lall Show: Tell It as It Is, Ram told listeners that, “Their (Exxon) own figures suggest that they have overcharged Guyana,” Ram said, “and they have never responded to the open accusation that I have made.”
The accusation that the attorney refers to is his charge that Exxon’s claim of US$460M pre-contract costs is overstated by at least US$92M. Ram’s calculation found that all figures supplied by the companies, even when one allows for all expenses and expenditures, amount to a far cry from the US$460,237,918 that Exxon and its partners, Hess and CNOOC Nexen are claiming.
Even then, Ram says that his assessment was generous. He had said that it is overstated by “at least” US$92M, because not all expenditure is recoverable as pre-contract costs. Ram reminded that the bill that Exxon’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), submits to Guyana comes out before anything else during profit sharing, while adding that the only “saving grace” in the contract is that in any year, the total recoverable cost cannot exceed 75%.
But even with this cap on recoverable costs, Guyana will still have owed Exxon and its consortium of oil companies US$20B by 2025, as shared by the Director of Finance under the Institute for Energy, Economics and Financial Analysis (IEEFA), Tom Sanzillo.
It is against this that Ram argued that the Guyana’s leaders are prepared to starve their own citizens, so as not to offend these foreign investors. “That cannot be right. There must be some equity in it all,” he notes.
The PSA states that the pre-contract cost “shall include four hundred and sixty million, two hundred and thirty seven hundred thousand and nine hundred and eighteen United States Dollars (USS 460,237,918) in respect of all such costs incurred under the 1999 Petroleum Agreement prior to the year ended 2015, “and … such cost as incurred under the 1999 Petroleum between January 1, 2016 and effective date which shall be provided to the Minister on or before October 3, 2016 and such number agreed on or before April 30, 2017.”
For purposes of this paragraph, the term pre-contract cost includes contract costs, exploration costs, operating costs, service costs, general and administrative costs, and annual overhead charge as those terms are defined in the 1999 Petroleum agreement.
Meanwhile, Commissioner-General of the Guyana Revenue Authority (GRA) Godfrey Statia recently revealed that his agency has completed one phase of the auditing of the pre-contract costs. A report of the findings has since been handed to Exxon for its response.
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Guyana Diaspora Forum
We have a large database of Guyanese worldwide. Most of our readers are in the USA, Canada, and the UK. Our Blog and Newsletter would not only carry articles and videos on Guyana, but also other articles on a wide range of subjects that may be of interest to our readers in over 200 countries, many of them non-Guyanese We hope that you like our selections.
It is estimated that over one million Guyanese, when counting their dependents, live outside of Guyana. This exceeds the population of Guyana, which is now about 750,000. Many left early in the 50’s and 60’s while others went with the next wave in the 70’s and 80’s. The latest wave left over the last 20 years. This outflow of Guyanese, therefore, covers some three generations. This outflow still continues today, where over 80 % of U.G. graduates now leave after graduating. We hope this changes, and soon.
Guyanese, like most others, try to keep their culture and pass it on to their children and grandchildren. The problem has been that many Guyanese have not looked back, or if they did it was only fleetingly. This means that the younger generations and those who left at an early age know very little about Guyana since many have not visited the country. Also, if they do get information about Guyana, it is usually negative and thus the cycle of non-interest is cultivated.
This Guyana Diaspora Online Forum , along with its monthly newsletter, aims at bringing Guyanese together to support positive news, increase travel and tourism in Guyana and, in general, foster the birth of a new Guyana, which has already begun notwithstanding the negative news that grabs the headlines. As the editor and manager of the publication, I am committed to delivering Blog entries and Newsletters that are politically balanced, and focused on the positive ideas we wish to share and foster among Guyanese.
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