Jagdeo pours cold water on Suriname’s royalty distribution to citizens
Dec 02, 2024
…says it is not a cash payment, lauds Guyana’s $100K grant
Kaieteur News- Vice President Bharrat Jagdeo on Thursday poured cold water on an announcement made by Suriname’s Head of State, Chandrikapersad Santokhi that each citizen there will benefit from the royalty received from its oil wealth.
Jagdeo said that while this concept has been compared to Guyana’s $100,000 cash grant initiative, it should be noted that the Surinamese will not be benefitting from a cash payout.
Vice President, Bharrat Jagdeo (Jagdeo pours cold water on Suriname’s royalty distribution to citizens)
Last week, President Santokhi during his Independence Day address to the nation said royalties will be paid “so that every Surinamese can benefit and profit from oil and gas”.
The Guardian reported that each citizen would receive an amount of US$750 in a savings account, with an annual interest rate of seven percent. President Santokhi said, “Everyone shall benefit from this opportunity and no one will be left behind.” In fact, he told citizens, “You are co-owners of the oil incomes.”
Weighing in on the announcement Jagdeo during his weekly press conference at Freedom House, Georgetown, said, “I see some comparisons are being made in the media between Suriname and Guyana because I saw President Santokhi announced that they will be getting a share in future royalty payments in Suriname and so it’s very different than what people are receiving here now in Guyana.”
He continued, “So in Suriname this is a royalty, they would have an IOU with like the citizens, from what I understand it to be. That it will come into being when they have first oil in 2028- that is when they expect first oil. So right now you are only getting a share worth US$750 and then you will get a 7% annual payment on that.”
The former Guyanese President said this amounts to just over US$50 per annum, which is also not a cash payment. “That’s a share in future revenue, starting from 2028 and you only get 7% of the US$750 per year. So, it’s very, very different. I hope people don’t get caught up in this in very misleading sort of propaganda,” the VP stated.
In October, French oil group Total announced a US$10.5B project to exploit an oil field off the coast of Suriname with a capacity of producing 220,000 barrels per day, commencing 2028. Guyana’s oil deal has been repeatedly compared to Suriname’s since the nation, although it is new to the sector, has managed to secure better fiscal terms for its resources.
Suriname has negotiated a 6.25 % royalty, a sliding scale profit split that allows the country to benefit from higher oil prices and a tax rate of 36%. Guyana on the other hand has accepted 2% royalty, 50% profit share after the contractor deducts 75% as cost, and no taxes.
Despite ongoing protest and widespread calls for the government to renegotiate the contract, the government is adamant that engaging the contractor now would affect investment in the oil-rich Stabroek Block and breach the ‘sanctity of contract’ provision.
(Jagdeo pours cold water on Suriname’s royalty distribution to citizens)
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