…country collecting thousands, while Exxon bagging billions on Guyana’s oil
By Davina Bagot
Kaieteur News – With a limited timeline to develop the vast resources discovered offshore Guyana, the government must redouble its efforts to ensure its citizens enjoy the benefits of the sector.
Pointing to the importance of this was Former Head of Maintenance and Reliability at BP Trinidad and Tobago, Kuarlal Rampersad.
In a recent interview with this publication, Rampersad, a consultant for energy, oil and gas, manufacturing, and power generation, as well as the General Secretary for the Regional division of the International Code Council (ICC) encouraged the Government of Guyana (GoG) to engage the Stabroek Block partners in a renegotiation of the lopsided oil contract.
The former Maintenance and Reliability Engineer, who was attached to BP for 33 years is currently Chairman of the Society for Maintenance and Reliability Engineering Professionals (SMRP), headquartered in Atlanta, Georgia.
According to the consultant, a key provision that can be included in the oil contract for Guyanese to take advantage of its newfound wealth is one that allows the country to benefit from a portion of the revenues earned by refining Guyana’s sweet light crude oil.
He explained, “What Guyana should ask ExxonMobil for now is a percentage of the value of the refined product. If the country doesn’t do this, Guyana will be losing billions of dollars in revenue.”
Rampersad pointed out that while a barrel of oil is sold for about $80 on the international market, ExxonMobil takes the raw commodity to its refinery which in turn allows the company to benefit from as much as six times the revenue in downstream products.
He said, “Let’s say a barrel of oil on the international market sells at about $80, when you go to refine that one barrel of crude, you are going to get almost $500 of refined downstream product such as aviation fuel, diesel, gasoline, paraffin, bitumen and others so ExxonMobil will be making billions of dollars when Guyana is only getting thousands of dollars.” As such, he contended that Guyanese should demand a portion of the wealth generated from its refined crude oil.
Rampersad insisted that the GoG should contract an independent firm to assist the country in seeking a review of the 2016 Petroleum Agreement. The consultant noted, “It cannot be a win-lose situation where ExxonMobil is winning, and Guyana is losing. It supposed to be at the end of the day, a win-win situation for all stakeholders.”
He pointed out that Guyana may not be as fortunate as the twin island to enjoy a century-long petroleum sector as the world transitions to renewable energy sources. In October 2023, the International Energy Agency (IEA) in its new World Energy Outlook (WEO) described an energy system in 2030 in which clean technologies play a significantly greater role than today. This includes almost 10 times as many electric cars on the road worldwide; solar PV generating more electricity than the entire US power system does currently; renewables’ share of the global electricity mix nearing 50%, up from around 30% today; heat pumps and other electric heating systems outselling fossil fuel boilers globally; and three times as much investment going into new offshore wind projects than into new coal – and gas – fired power plants.
To this end, the TT consultant strongly recommended that the country redoubles its efforts towards maximizing its benefits from the sector over the next 10 to 15 years.
“They will get rid of oil and gas soon, so Guyana needs to make as much money as possible and that revenue need to trickle down to the people…the Guyanese people need to demand certain things and the only way to do this is through dialogue… have meetings with the real people and tell them listen,” the consultant reasoned.
