The VP has announced some better terms for new oil contracts (called Production Sharing Agreements – PSAs) for the tiny new blocks, but we must first fix all the problems with the biggest oil block – the Stabroek Block – with the most proven oil of 11+ barrels. I believe the Stabroek Block has a lot more oil than the oil companies are telling us. You cannot give away the largest block of oil cheaply, and want to impose improved terms for the smaller blocks only. That is “penny wise, and pound foolish.” We need better terms for all our oil, gold, diamonds, timber, and all natural resources.
Years of pressure by Glenn Lall, Kaieteur News, Stabroek News and Environmentalists, have paid off. The protests and advocacy have caused the PPP Government which failed to renegotiate the oil contracts as promised during the elections to make some changes, although these are not comprehensive enough. The Government knows failure to renegotiate the current worst contract in the world would bite it in places it does not want to be bitten. But new, improved terms for the new blocks to be auctioned does not absolve the Government of fixing the ongoing bad contract that covers 11+ billion barrels of oil. It was never a case of keeping the bad contract, as is, and changing the new ones. It’s not a multiple-choice test of choosing “A” or “B,” it’s “C” – all of the above. We need better deals in all our natural resource contracts because these assets are non-renewable and exhaustible. Once oil and gold are removed, they are gone forever, and not available for future generations.
For the new PSAs, a “Half Guyana” party has made a big decision that will affect the whole of Guyana. In demonstration of “One Guyana,” the PPP Government should have used a national consultative approach by inviting suggestions from the public, and by discussing in Parliament. That would have been the “One Guyana” thing to do, as this is a big decision that binds successive Governments. The PPP cannot say it was elected to govern unilaterally as it sees fit and refuse consultations when it hangs by a one-seat majority.
For its part, the Opposition PNC is still clueless and has not offered ideas for a new PSA. They are too busy quarrelling about whether to shake hands with the Government or not, as revelations continue about destruction of election video footage and tampering of computer files in the attempted rigging at the 2020 elections.
Any new template for a PSA should have brought us to a total take close to the international average of 62%. The VP’s new template has not brought us there. The VP who had said he does not believe in Corporation Tax is proposing a 10% which is lower than Guyana’s current tax rate for corporations. That is also lower than the international agreement for a “Global Minimum Tax” that established a 15 percent effective tax rate where large corporations have profits. Why is it we want the richest, biggest corporation making gazillions in profits to pay a lower Corporation Tax than other companies are paying? Hope the Chambers and Private Sector would protest this unfairness.
They are many issues to be addressed in a new PSA ranging from disclosures of production data, timelines for audits, insurance, environmental protection, monitoring of expenses and exactly what we are paying for, etc. I call on the Government to release its “Draft PSA” for public review and comment, and to discuss the final PSA in Parliament. That will demonstrate “One Guyana.” It’s our wealth and our country, and we must care. Wake up Guyana!
Dr. Jerry Jailall
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