Dear Editor,
A DECEMBER 20 article in the Kaieteur News, under the headline “PNCR agrees ExxonMobil misleading Guyanese with billboards…says 52% is calculated from a fraction of total revenue,” seeks to misrepresent the information being presented on Guyana’s earnings from the sector.

According to this article, the billboards suggest that “Guyana is getting some 52 per cent from the Stabroek Block oil deal.” It further quotes the PNC/R’s spokesperson on petroleum matters, Elson Low, who correctly states that Guyana is getting 52 per cent of the profits and not 52 per cent of revenues. That is exactly what the billboard says.

The billboard reads: “More than GY$280 billion for Guyana since 2019. Guyana receives 52 per cent of all PROFITS from Stabroek Block – 50 per cent profit share plus two per cent royalty.” It is, therefore, clear that the misunderstanding, willful or otherwise, lies in the knowledge of what is revenue and what is profit.

Revenue is everything you get from the sale of a good or provision of a service. This includes the cost or investment to provide that good or service. Profit is everything earned above that production cost.

The first two projects, Liza One and Two, cost over US$10 billion, and according to media reports, the next one, Payara, is going to be another US$9 billion. Guyana has not spent any money to find the oil in the first two projects and won’t be doing so in the third, yet it is getting 52 per cent of the profits.

We can argue whether that figure is a large enough percentage of the profit or not. But what is critical to keep in mind is that the oil companies are also entitled to recoup the tens of billions of US dollars that they invest.

Yours sincerely,
Romel Khan