–former APNU+AFC minister Gaskin says

FORMER minister and son-in-law of previous Head of State David Granger, Dominic Gaskin, has described suggestions that Guyana is receiving 0.5 per cent in royalty payments as “a load of nonsense”

In a letter to a newspaper, he said: “…The suggestion that Guyana is only receiving 0.5 per cent in royalty payments is nothing short of a load of nonsense, as is any extrapolation arising out of that suggestion.”

This was in response to a Kaieteur News article published on March 6 with the headline: “Guyana only receiving 0.5% royalty instead of 2% from Exxon,” which attributed the claim to “Guyanese scholar and former Ambassador Dr. Kenrick Hunte”.

Gaskin said that according to information published on the website of the Petroleum Management Programme, Guyana produced 334.04 million barrels of oil between January 2020 and January 2024, and during that period, according to the monthly reports of the Natural Resources Fund (NRF), Guyana received royalties to the tune of US$501.76 million, and production share equal to US$3.114 billion.

“Readers are free to use some notional price per barrel of oil in order to get a sense of what these figures actually represent in terms of the two per cent royalty and the 50 per cent production share of profit oil owed to Guyana,” Gaskin further stated.

For context, the Stabroek Block Production Sharing Agreement (PSA) governs the division of shares of crude, and the payment of royalties for all current oil production being conducted by ExxonMobil.

Outside of the two per cent royalty clause, the PSA gives Exxon and its co-venturers up to 75 per cent of the yearly production of crude to cover their expenses, and the government and the consortium share the remaining “profit oil” 50/50. Royalties are paid on a quarterly basis in January, April, July and October.

The Former Minister said that he considers these amounts close enough to the actual amounts reported by the NRF, “especially when one considers that royalty and production share accrue constantly, and, therefore, at any point in time there are tens of millions of dollars in receipts outstanding.”

Moreover, he said it should be noted that oil prices vary. Gaskin also stated that he took note of the article written by Christopher Ram, in which he also addresses the subject of royalty payments.

“In this regard, it is useful to note that a royalty payment of US$57.6 million with respect to the preceding quarter was received by the NRF in January of 2023,” Gaskin said.