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ExxonMobil’s return on investments should not be used as an avenue to further deprive Guyana of its oil wealth – Norton Aug 31, 2024 News Kaieteur News – Leader of the Opposition, Aubrey Norton has said that Guyana’s oil wealth should not be subjected to disproportionate returns on ExxonMobil’s investments. Opposition Leader, Aubrey Norton ExxonMobil is the operator of the Stabroek Block in which it has a 45% interest. Its Co-Venturers, Guyana Exploration Ltd. holds a 30% interest and CNOOC Petroleum Guyana Limited holds a 25% interest. Under the provisions of the 2016 Production Sharing Agreement (PSA), the partners invest in the development and operations of the Block and recover those costs from Guyana’s oil each month. Notably, 75% each month is allocated to cost recovery, while the remaining 25% is shared with Guyana as profits. In addition to its profits, however, Exxon also enjoys a “massive” rate of return on its investments, as was revealed earlier this month by Vice President Bharrat Jagdeo. An investor’s rate of return is the percentage of net gain or loss by an investment over a period of time. This is a critical area that can be abused by oil companies to profit more through unfair charges to the country. The government remains reluctant to disclose what the company’s rate of return is but the Opposition Leader has urged that those costs should not further deprive this nation of its wealth. During a recent press briefing, he told Kaieteur News, “As a country, we invited Exxon to invest; we expect them to have returns on their investment. What we don’t want is the disproportionate returns and in that regard like we said, we will use that article in the PSA to make the changes to ensure the people of Guyana benefit and that there is a reduction of the asymmetry involved in the PSA.” Meanwhile, with regard to the unknown rate or return, the Leader said, “We have asked for it, we need the details as I have said before, but our general policy position has not changed that we need to make changes to ensure that we benefit more, and every area of the contract should be dealt with to ensure that the people of Guyana benefit significantly while ExxonMobil gets reasonable returns on its investments.” The Opposition Leader declined to comment on what a reasonable rate of return would be. He said he needed the necessary information at his disposal, lest he presents “jumbie economics.” Norton explained that factors such as how much has been invested to date, depreciation, and decommissioning would have to be assessed for him to arrive at that figure. “All of those variables will have to be factored in. We’d have to develop an economic model that allows us to put all those factors in and then arrive at what is reasonable, but for me to just say that to me that would be ‘jumbie economics’,” the leader pointed out. Massive return Chief Policymaker of Guyana’s petroleum sector, Vice President Bharrat Jagdeo clarified that the company was not using loans to fund the developments in the Stabroek Block; therefore, there was no interest cost added to the cost bank. The Vice President made it clear that the company was using the revenue generated in the block and funding the developments through equity. According to him, the company was earning a “massive” return on its equity. He explained, “If you supply financing, nobody does it and you’re an investor for free, if there is a cost to you then you recover the cost. So whether it comes in the form of a loan or an equity, you get a return. So in this case, Exxon has made it clear there is no interest cost. They are financing the operations from equity and from their own retained earnings. There is no interest cost so don’t you think they get a return on their equity? They’re getting a massive return on their equity and that is exactly what is happening here. They have chosen not to go down the interest route, but they are getting a return on their equity.” Since there is no interest cost, Kaieteur News asked the Chief Policymaker for the oil and gas sector on Thursday to say what the rate of return on the company’s equity is. To this end, Jagdeo explained that the rate changes over time, adding that the company will enjoy greater returns in the future after the investments have been repaid. Related Similar Articles

New Int’l hotels in Guyana will not increase cost-of-living – Jagdeo Aug 31, 2024 News Vice President, Dr. Bharrat Jagdeo …says more hotels will create more jobs and opportunities for locals Kaieteur News – Vice President (VP) Bharrat Jagdeo has dismissed concerns that the surge in hotel construction across Georgetown and surrounding areas, will further drive up the cost of living. Instead, he argued that the expansion of hotel capacity could stabilize or even lower accommodation costs, benefiting both locals and returning nationals. Guyana’s rapidly expanding oil and gas sector has attracted significant international attention, leading to increased demand for high-quality hospitality services. In addition to the seven new hotels that are expected to be open next year, Hilton on Wednesday announced its debut in Guyana with the signing of a dual-brand project planned for the capital, Georgetown. The upcoming Hilton Georgetown and DoubleTree Suites by Hilton Georgetown owned by an affiliate of Assets Group and managed by Hilton will mark the company’s first entry into the country, bringing a combined total of 411 rooms to the city. At his press conference on Thursday, Jagdeo was asked whether the influx of tourists, drawn by the growing number of hotels, might lead to higher prices for goods and services, potentially adding more difficulties for Guyanese that have been complaining about the high cost-of-living. The Vice President responded by pointing out that increased hotel availability would enhance competition, making it easier for people to find reasonably priced accommodations. “So the way I see it is that if you have greater supply, you have greater supply. So a lot of our tourist are Guyanese who come back home. So far the bulk of the people who come into our country are Guyanese who return home,” Jagdeo said. Jagdeo said that returning Guyanese nationals face high accommodation costs due to limited availability. As such, he believes that more hotels would mitigate this issue and make Guyana more competitive. He also said he believes more hotels would have positive effects on tourism, employment, and the local economy. He noted that the seven new hotels alone would create approximately 300 jobs for Guyanese and significantly boost the tourism industry by providing more affordable options for visitors. “So about 300 Guyanese can find jobs in these hotels that are built, so it can have a positive effect on employment creation. If you have more tourists here too, they would consume more local stuff so we are pushing people to provide the local [cuisine],” he continued. Furthermore, Jagdeo said that increased tourist activity would drive demand for local products, benefiting farmers and other suppliers. He cited examples like the Guyana Marriott and Hard Rock Café, which have already started incorporating local foods into their offerings. Jagdeo added, “So it means more demand for our farmers and anything else to supply fresh fruit, vegetables, and a whole range of supply, so I can only see it in a positive sense.” Looking ahead, Jagdeo envisions Guyana as a future host for major international events, supported by the new hotels and stadiums. “I can see it in a more positive sense and we will be able to host more international events like cricket; we are building a couple of stadiums, we can run a whole tournament in the future if we have two stadiums… so I see these things entirely in the positive sense,” the Vice President said. It should be noted that while the Government of Guyana (GoG) has been pushing for more hotels to be constructed to support the expanding economy, the government had moved to sell the Guyana Marriott Hotel. Since June 2023, state-entity the National Industrial and Commercial Investments Limited (NICIL) was in talks with American businessman Ramy El-Batrawi, who had bid US$90 million for the Kingston, Georgetown property.  However, before the deal was finalised the businessman passed away bringing end to those negotiations. Moreover, the Vice President had revealed that despite the criticism the hotel faced when the construction was announced – the hotel has emerged as a profitable venture, but justified the sale of the hotel by stating that it was a business decision. Jagdeo said that while the hotel is making a profit, it is of no supreme benefit to the Government owning it anymore, adding that within a few years, several hotels are expected to come on stream and in order to avoid competition, this is the best time to maximise the profit and sell the hotel. Related Similar Articles

No extraditions from Guyana in 2024 – Home Affairs Ministry Aug 31, 2024 News …says fugitives opted to return to the U.S. Kaieteur News – The Ministry of Home Affairs on Friday debunked claims that Guyana has extradited persons to the United States of America this year. In a statement issued on the Ministry’s Facebook page, the ministry said, “there have been no extraditions from Guyana to the United States of America in 2024 to date. The term “extradition” was incorrectly used during a News Source broadcast on August 27, 2024.” The statement said that three fugitives who had outstanding warrants were arrested by the Guyana Police Force (GPF). The trio, all citizens of the U.S. opted to return to the U.S. rather than face deportation from Guyana. The three persons have been identified as Quincy Hinds, Rakeem Antonio Gilgeous and Ravindra Dharamjit. Hinds departed Guyana on May 11, 2024. He was charged in 2019 in the Eastern District of New York with conspiracy to import cocaine and conspiracy to possess cocaine with intent to distribute. After making an initial court appearance, he fled to Guyana upon posting bond. Gilgeours departed Guyana on July 31, 2024. Gilgeours is wanted in Prince George’s County, Maryland, for a homicide and two attempted murders. On July 4, 2024, during a block party attended by approximately 200 people, a dispute led to an exchange of gunfire, resulting in the death of a six-year-old child and injuries to an adult male and female. He was identified as the shooter and fled from New York to Guyana to evade prosecution. Meanwhile, Dharamjit, who departed Guyana on August 13, 2024, is wanted in Queens, New York, for manslaughter in the Second Degree, Criminally Negligent Homicide and Flight to Avoid Prosecution or Giving Testimony. The offenses were committed in 2019. The Home Affairs Ministry explained that the extradition “involves a formal request from the government of one country to the Government of Guyana. No extradition requests were received from the United States for any of the three individuals.” The ministry said it remains committed to transparency and accuracy in all matters of public interest. Related Similar Articles

‘One hand’ remanded for attempted murder Aug 31, 2024 Court Stories, Features / Columnists, News Kaieteur News – A 42-year-old labourer of Windsor Castle, Essequibo Coast was on Friday charged for attempted murder and remanded to prison. Mohan Lall The accused, Mohan Lall, called ‘One Hand’ appeared at the Suddie Magistrates’ Court before Magistrate Tamieka Clarke. He was not required to plead. Reports are that on Monday, August 26, 2024 at Windsor Castle, Lall attempted to kill 40-year-old Derrick Ramsaroop, a part-time worker. The case was adjourned to September 24, 2024 for report and disclosure of statements. Related Similar Articles