Skip to main content

BADAL ‘BAGS’ BILLIONS

0
3293
Share on Facebook
Tweet on Twitter
Presidential Candidate of Change Guyana, Businessman Robert Badal

…Finance minister says Pegasus owner benefitted from billions in tax concessions
…to soon release full list of all the incentives

By Lisa Hamilton

PRESIDENTIAL Candidate of Change Guyana, Businessman Robert Badal has benefitted from “billions of dollars” in tax incentives although one of his main mantras in his election campaign is the “burden on the taxpayer”.

Very soon, a list of all such concessions will go public, Minister of Finance, Winston Jordan has promised. On Benschop Radio on Tuesday on the topic of concessions, questions were asked in regards to Badal and Jordan did not mince his words. “Mr. Badal has benefitted from billions of dollars of tax incentives. Billions of dollars. In fact, I’m now asking my people to total up how much are these concessions, but I know they run into billions of dollars,” he stated.

QUANTIFY IT
At a recent press conference, Badal, one of Guyana’s newest party leaders, promised to create an effective tax policy to promote economic growth should his party be elected.
“Excessively high taxation has been a feature and consequence of large governments under the PPP and Coalition governments over the past three decades…over that period government transferred hard earned income from the Guyanese people to government coffers with not much to show in terms of development,” he said earlier in November.

However, Jordan said that much of Badal’s remarks on taxes are surface level and fail to examine the intricacies involved. “It seems these days [it is] fashionable that if you don’t get what you ask for in full, then you can go form a party and spout whatever you think you will do. I would like those people who think Mr. Badal is the next [leader] to ask him to quantify –not just talk to say we will lower taxes –quantify what it means and how you are going to replace the lost revenue. Quantify it,” Jordan said.

The failure to provide a plan runs similar to the floating of People’s Progressive Party (PPP) Presidential candidate, Irfaan Ali that, once in power, the party will create 50,000 new jobs.
Ali has failed to provide a satisfactory response to the media on how exactly this would be achieved. At another press conference, the Change Guyana party had promised immediate reduction in Value Added Tax (VAT) from 14 per cent to 12 per cent if elected.
The Finance Minister said: “You can’t just spout these things by sitting down in front of some TV or in your hotel and say ‘oh, we gon do this, we gon do that’ [and] when you get into government, different story.”

Minister of Finance, Winston Jordan

Just recently, Jordan had cause to label the cries of the private sector of “heavy taxation” as a “ruse” to hide what is going on in that sector. He advised that persons investigate whether the sector is truly “heavily taxed” as the government has significantly reformed the taxation system in favour of the private sector. Jordan contended that the revenues which government has been getting since 2015, has come from an expanded base and not new taxes on the private sector.

He believes that contrary to what is being said by the private sector, government has done a lot to improve the sector and promote business. The Finance Minister referred to the tax amnesty which was proffered in 2018 to allow taxpayers who had defaulted to sort it out with the Guyana Revenue Authority (GRA). The period of amnesty for taxpayers, both corporate and individual, would ensure that they are able to get in order, the filing of true and correct tax returns and payment of their true and correct taxes.
On the programme, he also spoke on the topic “Tax concessions in other areas. On Monday in a statement, Badal said that Exxon has been “exempted from paying taxes for the life of the project” while the private sector and citizens cannot get the same.

Speaking to the same, Jordan said that while certain entities have been suggesting that there is a disparity in the concessions given to foreigners versus local companies, locals have the opportunity to get the same if they win a contract with the foreign company.
In the case of ExxonMobil — which has dominated certain media entities — he explained that a subsidiary of ExxonMobil is just that and not defined in the Production Sharing Agreement (PSA) as either foreign or local. Explaining further, he stated: “If a local company bids for a contract with Exxon and gets that contract, everything it supplies to Exxon will be in accordance with the PSA because what is given to Exxon must also be given to subsidiaries…once you are a local company and you would have won that bid for Exxon, you can import all [specified materials] for Exxon duty free or tax free in accordance with the PSA.”

He added that Exxon’s investment in the face of high risk cannot be compared to other ventures. “When you look at the investment that Exxon has done, when you look at the risk that Exxon has taken in deep waters and these types of things when nobody wanted to go even though we were giving them all the concessions, how can you compare concessions given to Exxon with not another Guyanese company that is going to drill for oil but some investment in some other place where they already have lights, water, power and all these different [things]?” he questioned.

Original Post

Replies sorted oldest to newest

Dave posted:

Exxon take risk and invest- according to Jordan.. Hey Hey . 

Guyana is on the hook to repay every cents  that Exxon invest, so what risk did Exxon take. 

Absolute Nonsense!

Exxon took all the risk in event no oil was found.  That’s the risk!!  Guyana is not (never was) on the hook!  Now that they found oil, Exxon will recoup their upfront investment first!  That’s a standard model.  Guyana owes Exxon nothing unless Guyana cancels out.  

I thought you were a business man!  How do you run a business, is your upfront investment disregarded?

Read what he said carefully!  Exxon would never have taken the risk if it was not a sweetened deal.  This all played into their risk-adjusted return on investment model!

Badal’s risk were very different and his strategic implications on Guyana were nothing compared to Exxon’s venture!

Frankly I find Badal coming across very self serving!

Baseman posted:
Dave posted:

Exxon take risk and invest- according to Jordan.. Hey Hey . 

Guyana is on the hook to repay every cents  that Exxon invest, so what risk did Exxon take. 

Absolute Nonsense!

Exxon took all the risk in event no oil was found.  That’s the risk!!  Guyana is not (never was) on the hook!  Now that they found oil, Exxon will recoup their upfront investment first!  That’s a standard model.  Guyana owes Exxon nothing unless Guyana cancels out.  

I thought you were a business man!  How do you run a business, is your upfront investment disregarded?

Read what he said carefully!  Exxon would never have taken the risk if it was not a sweetened deal.  This all played into their risk-adjusted return on investment model!

Badal’s risk were very different and his strategic implications on Guyana were nothing compared to Exxon’s venture!

Frankly I find Badal coming across very self serving!

If you believe Exxon wake up one morning and decide oil is in Guyana, think again. 

In 2000, the U.S. Geological Survey estimated the Guyana-Suriname Basin could hold some 13.6 billion barrels of oil and 32 trillion cu ft of natural gas in recoverable reserves. That was 19 years ago, and since then exploration and production technology has improved significantly, making more barrels technically recoverable. No wonder Exxon has been striking oil repeatedly.

https://drillers.com/guyana-th...lobal-oil-map/thanks 

Pre-contract costs are no chicken feed

Guyanese are excited about first oil happening for Christmas. But they should remind themselves about the pre-contracts costs which have to be paid – that is, the costs of Exxon’s exploration prior to the signing of the contract on October 7, 2017.
Pre-contract costs for the period 1999 to 2015 have been tagged at US$460M. And from January 2016 to October 2017, it is estimated that the oil companies would have ratcheted up another US$400M in pre-contract costs. This means that even before oil production begins, Guyana has to repay to Exxon and its partners close to US$900M.
Most Guyanese have dismissed these costs as incidental and insignificant relative to the oil revenues that Guyana will earn. They claim that the country will earn enough to pay off easily the pre-contract costs. And therefore they are not paying much attention to verifying these costs to ensure that Guyana is not overbilled.
US$900M is about three times what Guyana is expected to earn in 2020 from oil production. US$900M is a great deal of money, anyway you look at it.
It is not the sort of money which should be easily dismissed. With US$900M Guyana can construct three international airports, one for each of our three counties – Berbice, Demerara and Essequibo. In addition to that, it can build two more bridges each across the Demerara and Berbice Rivers, and create a bridge link between Parika and Leguan. The country can also develop another highway from Crabwood Creek to Georgetown and then to Timehri. All of these things can be done, with money left over, for less than US$900M.
Kaieteur News has been like a voice crying out in the wilderness. It has been pointing out how the country has been shortchanged during the oil negotiations. The population is not saying anything. People are so divided politically that many do not wish to admit what they know in their hearts: that the country’s got a 6 for a 9 in the negotiations.
People are more excited about how the oil revenues are going to be spent rather than addressing how much more the country could have been receiving. People are proposing things for the government to do without calculating how much the country will receive. This is called counting your eggs before they are hatched.
With 2% royalty and 75% cost recovery per annum without ring fencing, Guyana will not be overflowing with riches anytime soon. Some persons have said that the oil riches will come after the first five years – that is from 2025, when oil production is expected to increase. But no one has asked what is likely to happen to oil prices within the next five years. There is no guarantee that with fracking and improvements in renewable energy the price of oil will stay as high as it is projected to do.
Oil don’t spoil is what Eric Williams once told Forbes Burnham. But oil runs out. And Guyana’s oil is going to be exhausted within the next 40 years. This is not as long as people think, considering that Guyana gained independence 50 years ago, which seems like only yesterday.
So what is going to happen to our children and grandchildren when the oil is exhausted? The argument is that they will be well taken care of, because oil revenues are going to be placed in a sovereign wealth fund.
What this means in practice is that all of oil revenues cannot be spent during the next forty years. The government has to make provisions for the next 100 years, and therefore only a percentage of that which is going into the sovereign wealth fund is going to be available for spending locally. This is all the more reason why instead of staying silent, Guyanese should have been demanding a better deal from Exxon.
Guyanese will continue to live in hope and die in despair because they are divided, even on an issue which should have united them: ensuring a better deal for our children and their children. They are so divided that our journalists are not even prepared to ask simple questions.
The President of Guyana was live on Kaieteur Radio last Friday and the one question which was not posed to him was whether the oil deal was signed behind his back. Jan Mangal, a former adviser to the government, has publicly said that the President seemed surprised when he told him that an agreement had been signed. No journalist has had the courage to ask the President whether he approved of the deal before it was signed.
And if the media is divided that it cannot pose such a simple question, then what hope is there that the government would be scrupulous in auditing pre-contract costs. Just consider how much could have been done with US$900M and you will appreciate how important it is to ensure these costs are verified

You are a very silly person.  If Exxon applied industrial knowledge and wherewithal to improve their probability, that’s their competitive advantage!  If the Guyana experts knew where to find oil, then CGX would have!  Also, if Guyana knew, why not co-fund the exploration for a better long term deal!  That’s called risk sharing!

Guyanese are some on the most stupid people I came across!  They have all the answers yet cannot figure the problem!

If Exxon knew, why so many years it took to find oil?  How many dry wells?  Why would the incur 500 mil before striking?

Ponder some logical questions before delving into the weeds like a blind bat!

You have no clue how international business works!

Baseman posted:

You are a very silly person.  If Exxon applied industrial knowledge and wherewithal to improve their probability, that’s their competitive advantage!  If the Guyana experts knew where to find oil, then CGX would have!  Also, if Guyana knew, why not co-fund the exploration for a better long term deal!  That’s called risk sharing!

Guyanese are some on the most stupid people I came across!  They have all the answers yet cannot figure the problem!

If Exxon knew, why so many years it took to find oil?  How many dry wells?  Why would the incur 500 mil before striking?

Ponder some logical questions before delving into the weeds like a blind bat!

You have no clue how international business works!

Base, you believe you knows everything and when someone present an opinion that doesn’t sound good, you resort to trash talking. If that makes you fell good, good for you. 

You have great ideas.. no kidding. Consultancy job is very profitable, I know of some who are living the life and hope you are too, if not, I will encourage you man. 

As for me, I have been very successful in my business ventures. 

I stand by what I said and will repeat, EXXON did not go blindly into drilling for oil. 
You should research why EXXON caps the oil and then announce discovery in 2015. 

Regarding you question about CGX, they are Canadian own. 


It was the American Geological Survey that did its research back in 2000 and found reserves and EXXON is a American Company .. rite . I posted the link of  the comments below. I didn’t write those words. 

Exxon leverage on the US Survey and caps the well, then went into agreement with the Guyana Government, who sold everything away in the contract. 

In 2000, the U.S. Geological Survey estimated the Guyana-Suriname Basin could hold some 13.6 billion barrels of oil and 32 trillion cu ft of natural gas in recoverable reserves. That was 19 years ago, and since then exploration and production technology has improved significantly, making more barrels technically recoverable. No wonder Exxon has been striking oil repeatedly.

 

I should add, my comments are just my opinion and I use common sense. 

Banna I don’t pretend to solve people’s problem. I don’t know and I am not interested. 

Last edited by Former Member

Base has unfortunately learned some aggressive argument style from those other fools who does nothing other than cuss posters out. Maybe he will realize the error of his ways and make the necessary corrections. Those fools are not worth emulating.

ksazma posted:

Base has unfortunately learned some aggressive argument style from those other fools who does nothing other than cuss posters out. Maybe he will realize the error of his ways and make the necessary corrections. Those fools are not worth emulating.

He should have use wisdom and analysis the US survey to see if Exxon knew there was minimal or no risk in drilling for oil and have a healthy debate, rather than been aggressive. 

But he chooses such method because he thinks Jordan is correct. 

The U.S Geological did the risk assessment and NOT Exxon. 

This is what I found about USGS.

The United States Geological Survey (USGS, formerly simply Geological Survey) is a scientific agency of the United States government. The scientists of the USGS study the landscape of the United States, its natural resources, and the natural hazards that threaten it. The organization has four major science disciplines, concerning biology, geography, geology, and hydrology. The USGS is a fact-finding research organization with no regulatory responsibility.

Dave posted:
 

If you believe Exxon wake up one morning and decide oil is in Guyana, think again. 

In 2000, the U.S. Geological Survey estimated the Guyana-Suriname Basin could hold some 13.6 billion barrels of oil and 32 trillion cu ft of natural gas in recoverable reserves. That was 19 years ago, and since then exploration and production technology has improved significantly, making more barrels technically recoverable. No wonder Exxon has been striking oil repeatedly.

https://drillers.com/guyana-th...lobal-oil-map/thanks 

Like duh !!!! do you know of any drilling before that date ??

Last edited by Django
Baseman posted:

You are a very silly person.  If Exxon applied industrial knowledge and wherewithal to improve their probability, that’s their competitive advantage!  If the Guyana experts knew where to find oil, then CGX would have!  Also, if Guyana knew, why not co-fund the exploration for a better long term deal!  That’s called risk sharing!

Guyanese are some on the most stupid people I came across!  They have all the answers yet cannot figure the problem!

If Exxon knew, why so many years it took to find oil?  How many dry wells?  Why would the incur 500 mil before striking?

Ponder some logical questions before delving into the weeds like a blind bat!

You have no clue how international business works!

You know you are correct !!!  53 yrs since independence ,still backwater country .Also they love to do comparison with the USA , some thinks Guyana is wan little America.

Over 40 years ago my biology teacher, Ms. Allen, said that there were lots of oil around the edge of the continents but almost impossible to extract.  She was right. Exxon now has the technology to do it.

Last edited by Billy Ram Balgobin

It was stated that Guyana has OIL since 50 years ago, during Burnham time, many oil companies had shown interest but then the government wanted majority share, thus the investors walked.

It is logical to assume that Guyana would have oil, basic Geography will teach you so. Brasil, Venezuela, Suriname and Trinidad all have oil, Guyana is below sea level and sits in the Middle. They have to negotiate  a reasonable priced drilling company to do a series of drills, If I was the government, use the funds from Exxon to pay for the drill, so doing you will keep a bigger share for the People of Guyana. But, NAH, they all want Quick MONEY in their over seas bank accounts, PNC, PPP, AFC, etl.

Django posted:
Dave posted:
 

If you believe Exxon wake up one morning and decide oil is in Guyana, think again. 

In 2000, the U.S. Geological Survey estimated the Guyana-Suriname Basin could hold some 13.6 billion barrels of oil and 32 trillion cu ft of natural gas in recoverable reserves. That was 19 years ago, and since then exploration and production technology has improved significantly, making more barrels technically recoverable. No wonder Exxon has been striking oil repeatedly.

https://drillers.com/guyana-th...lobal-oil-map/thanks 

Like duh !!!! do you know of any drilling before that date ??

F69ED9F2-D1CE-4EB1-832A-47A22CE9212A

Attachments

Images (1)
  • F69ED9F2-D1CE-4EB1-832A-47A22CE9212A
Bibi Haniffa posted:

Burnham refused 35% Royalty.  Granshaw tek 2%.

And Jordan's lack of vision adds insult to that 2% injury.

The US$18M bonus made the Coalition so drunk they are still trying to sober up.

Django posted:
Dave posted:
 

If you believe Exxon wake up one morning and decide oil is in Guyana, think again. 

In 2000, the U.S. Geological Survey estimated the Guyana-Suriname Basin could hold some 13.6 billion barrels of oil and 32 trillion cu ft of natural gas in recoverable reserves. That was 19 years ago, and since then exploration and production technology has improved significantly, making more barrels technically recoverable. No wonder Exxon has been striking oil repeatedly.

https://drillers.com/guyana-th...lobal-oil-map/thanks 

Like duh !!!! do you know of any drilling before that date ??

Django bhai, there were lots of drilling. As a kid growing up, we have seen men drilling and sealing wells. Our teachers told us they were drilling for oil. And this was in the fifties and maybe early sixties.

Bibi Haniffa posted:

Burnham refused 35% Royalty.  Granshaw tek 2%.

Burnham wanted 50 percent royalty rate. Only Home Oil agreed to that. As soon as Home Oil 400 barrel at day well start dropping Home Oil pack up equipment and high tail it out of Guyana.

Add Reply

Post

×
×
×
×
Link copied to your clipboard.
×
×