…Harmon slams Jagdeo’s ‘doom-and-gloom’ posture
…says his assessment of oil profits far removed from the reality of Guyana
MINISTER of State Joseph Harmon has condemned the ‘doom-and-gloom’ posture being adopted by Opposition Leader Bharrat Jagdeo pertaining to development here, noting that recent statements attributed to him regarding the emerging oil sector here show how far removed he is from the reality of this country.
Harmon was referring to Jagdeo’s remarks at the Georgetown Chamber of Commerce and Industry’s (GCCI) Annual Awards and Dinner Gala on Wednesday. The remarks were captured in headlines of the Guyana Times and the Stabroek News, “Benefits from oil will not be seen before 2025–Jagdeo” and “Jagdeo accuses gov’t of creating unrealistic expectations of oil wealth”, respectively.
Harmon described Jagdeo’s comments as wicked and inaccurate, noting that the opposition leader seems bent on creating fear and a sense of “doom and gloom” in the minds of Guyanese at all costs. Mr. Jagdeo is quoted by the media entity as stating, “Even the oil companies, because they talk to me, they don’t have such a rosy picture of the fortunes of Guyana changing drastically, dramatically in the timeframe that we think it will happen. It will happen, but it will happen not from 2020 to 2025, those will be rough years for us…There is a timeline to all of these things, it’s not going to happen immediately.”
Wild claims
Harmon rejected the statements made by the opposition leader, while noting that Mr. Jagdeo’s persistent negativity has become a pattern. “As you would recall, for the last week … wild and unsubstantiated statements …are being made by the opposition. Every day we have to put out statements to correct them. This is one of those wild assertions made by Mr. Jagdeo; and it just goes to show how far removed he is from the reality of Guyana,” he said.
Minister Harmon then referred to the statements made by ExxonMobil, the Inter-American Development Bank, and the Georgetown Chamber of Commerce and Industry about the country’s prospects. “All of these entities have spoken positively about the development that is taking place in Guyana and about the fact that in 2020, we will have a significant change in our fortunes. So, this that Mr. Jagdeo is doing is to put a damper on the enthusiasm which now exists in this country and the enthusiasm which now exists among countries and companies abroad who want to invest in Guyana,” he said.
The Minister of State made it pellucid that the APNU+AFC coalition government has created a framework which will allow for safe investment in this country and for people to make a better living for themselves and their families. Minister Harmon believes that Guyanese will reject Mr. Jagdeo’s analysis of the future as he is far removed from reality.
“I would like to advise Guyanese not to accept at face value, anything that the leader of the opposition says, but you should go and get the facts. There are several pieces of publications and daily, the Department of Public Information and other agencies are putting information out. You can follow the budget debate. He is not providing the correct information,” the minister added.
Guyana’s earnings
While the opposition leader is seemingly on a mission to spread inaccurate information and create a sense of foreboding and apprehension among the population, the MotP would like to point out that in August 2017, while Minister of Natural Resources Mr. Raphael Trotman still held the portfolio for the oil and gas sector, he announced that a report from the International Monetary Fund (IMF) had predicted that Guyana will earn at least US$380 million per year in the early years of oil production.
“Based on that report, the IMF predicts that Guyana will earn $380M a year in the first couple years, before we get into the billions. So, it is a lot of money that will be coming. They have already started advising us on how much money will come from taxation, from profits, from royalties…,” Minister Trotman had noted.
Further, on that occasion too, the minister said that based on its projections, the IMF is of the view that oil will have a large impact on Guyana’s Gross Domestic Product (GDP). The IMF has forecasted that oil revenue is expected to amount to 2.6 per cent of GDP in 2020 and will rise to about 4.6 per cent in 2021, which will be the first full year of oil production.
Additionally in May 2018, Rystad Energy, which is an independent research and business intelligence company based in Norway, said that it predicts that oil production in Guyana will exceed 600,000 barrels per day over the next decade, raking in billions of dollars in profits per year.
Head of Upstream Research at Rystad Energy Mr. Espen Erlingsen, who was also quoted by several media outlets, said that ExxonMobil’s discovery of the Liza field in 2015 placed the country on the global energy map. “We predict Guyana’s total oil production to surpass 600,000 barrels per day by the end of the next decade. These volumes could generate total annual revenue of $15 billion from the oil and gas industry. After all costs are paid, around $10 billion of profits could thus be split between the companies and the government,” Mr. Erlingsen said.
For a small, developing country such as Guyana, these earnings in the first few years alone can significantly spur growth and transformative development, particularly in the areas of the economy, infrastructural development, healthcare and education; areas which remain priorities for this administration.
Meanwhile, the IDB has approved a US$11.6 million loan for Guyana, which will help to prepare the country for its transition towards becoming a major oil and gas-producing state. According to the IDB’s website, “This project is designed to support the strengthening and the sustainability of the energy sector in Guyana by contributing to the institutional development of oil and gas governance and the development of cleaner energy sources for electricity generation.
The specific objectives of this loan programme are first, to develop a management and planning framework for Guyana’s oil and gas sector; and second, to contribute to the development of a policy framework, so that Guyana may diversify its electricity-generation matrix using cleaner or renewable sources.”
The IDB noted that Guyana’s new energy scenario, which will likely yield significant revenues for the government, represents a transformative shift in Guyana’s development trajectory. “It embodies a crucial and unprecedented opportunity for economic growth and sustainable development. The conversion of short-term oil wealth into long-term well-being hinges on the capacity of the Guyanese government to adequately manage this new sector and enact productivity-enhancing reforms. If handled well, it can boost the overall standard of living for the country,” the IDB said.
Similarly, ExxonMobil’s Upstream Operations Manager Mr. Doug McGehee at the launch of the GCCI’s Business Guyana Magazine at the Guyana Marriott Hotel in July 2017, said that Guyana will receive revenue from day one of production. The ExxonMobil official noted that it will have positive impacts on the economy, including some that should be seen already.
“The big thing though, is the revenue that comes from the project. When the project starts, the government gets revenue from day one. I hope you’ve already seen some of the impacts. We opened a Centre for Local Business Development, which is something we’ve done in other places of the world. It’s trying to match up potential contracts with potential local businesses,” he said.
At the same event, President of the GCCI Mr. Deodat Indar, also recognised the tremendous changes that will come with the production of oil. Mr. Indar said, “Guyana can witness an economic explosion with the Gross Domestic Product growing between 400% to 2000% in the next two decades.”
Moreover, Minister of Business Mr. Dominic Gaskin speaking at the opening of a Private Sector Commission- organised seminar under the theme, “Oil and Gas in Guyana: Perspectives in Guyana” in March of this year, had stated that in addition to the earnings in the first two years of oil production, by 2022 when the second phase of development starts, government revenues would see an increase to approximately US$800M per year.
Guyana is making strident steps in the oil and gas sector. With the incoming revenues and the establishment of the Natural Resources Fund, every Guyanese stands to benefit from an improved quality of life. The Ministry of the Presidency therefore calls on all right-thinking Guyanese to ignore the “doom-and-gloom” rants of the leader of the opposition, which are aimed to create unnecessary fear and apprehension.
The ministry also calls on the leader of the opposition who is quoted as making these spurious claims, without providing any actual evidence or proof, to be honest in his public statements instead of spreading untruths to aid his campaign against the government. (Ministry of the Presidency)
