Dear Editor,
As a concerned senior citizen, I write this letter to draw the attention of those Bureaucrats, and to request that they inform all Guyanese in all walks of life, what could be expected for the future years ahead.
Looking at what has been agreed to with Exxon, and as far as I can see, (please correct me if I am wrong) the Company takes half of all the oil produced, without any cost to themselves and no taxes whatsoever. I am sure their shareholders are going to say thank you so much, you stupid people.
On the other hand, Guyana and more importantly, the people of Guyana, have to bear the total cost in every way, start-up, exploration, extraction, and even the toilet paper they use.( my apologies if I am incorrect), from half of the proceeds received from the sale of our crude.
So, the question I am asking is what would be left for us Guyanese, if anything at all or with bankruptcy.
Let us look at the known factors.
Guyana has received bills from Exxon for approximately US$6 billion start-up-costs and recently US$7 billion for the first year. My fellow Guyanese, we are talking of BILLIONS, not millions. Guyana has never had such a debt in its history. And it will get worse when the bills come in.
I can remember my father telling me, the son never hangs your hat where you cannot reach.
Now let us look at the income Guyana has received from its share of oil to date. Approximately US$280 million, I repeat millions, not billions.
I would like to ask the Bureaucrats if they could kindly produce a graph of income and expected bills from Exxon for five years and ten years, to give Guyanese some idea of what could be expected.
I will endeavour to do my own estimate based on the above-known figures, and extrapolate and stand corrected.
Production. Year 1. 100,000 bpd. Year 2. 100,000 bpd, Year 3. 150.000 b[d. Year 4. 300,000 bpd. Year 5. 300,000 bpd.
Price per barrel estimated:- Year 2, $80 Year 3, $100. Year 4. 100. Year 5. $120
Shipments Year 1.- 4 Year 2.- 4 Year 3 – 6. Year 4 – 12. Year 5. – 12
I would assume expenses billed as estimated as follows:-
Year 1. US$7 billion; Year 2. US$6 billion; Year 3 US$6 billion. Year 4. US$10 billion. Year 5. $10 billion. Start-up costs, US$6 billion.
Total for 5 years $45 billion. Estimated and stand corrected.
Estimated Income from shipments for 5 years
Year 1. Already ready received $280 million
Year 2. $320 million
Year 3. $600 million
Year 4 $1,200 million
Year 5 $ 1,440 million
Total: Income in 5 years approximated US$3,840 million.
Billed costs $45 billion, or even let us be conservative and take half of that figure and say that billed expenses is approximately US$22.5 billion and then compare that to the income of $3.840 billion. That is US$3.84 billion. I don’t think a further explanation is needed since we are looking at a loss of US$18.660 billion.
Further, even if the Bureaucrats should sit around the table and Exxon would accept 50 percent of the cost expenses, Guyana would still be bankrupt. That is if we take billed expenses as $11.25 billion against an income of say approximately $4 billion for the period of 5 years. A loss of US$7.25 billion to Guyana and the same should apply to Exxon. Maybe that is the reason Exxon does not have any expenses.
It is common knowledge how the West African countries including Angola are now poorer and are receiving aid from the UN and the World Bank. I am of the view that Guyana would become one of the poorest in the world. Please prove me wrong.
My question is what will become of Guyana and its citizens.
