Exxon Mobil will own you if you take advance money  – Jagdeo warns

Jagdeo is right. Everyone should read the book I posted for Gil. It is about the basis of such negotiations and how one gets screwed.

Give dem wan lil jill and tek dem bit na haff.

They are selling their soul to the devil so when they walk out of there in 2020 the next government will have to repay the debt.  This is short term thinking and poor negotiation as they are giving the beast the upper hand from now.

My parents would say "you tink me ah buckman nah".

It takes a man to lead a country ,not little boy without experience. SHORT TERM GAIN FOR LONG TERM PAIN.

Jagdeo should know...he got experience

They have a right to ask for the advance. The PPP would have done the same. The oil is opportunity. However, the ask must be with respect to informing us about the projects they intend to pursue, and they will also have to detail them to the extent that we get a picture of what they want done. Lacking that they will do like the PPP did and steal us blind.

What clowns you are.  If they want a loan, go to the WB and make a case of the oil find.  Negotiate it independently of Exxon and strike a deal with Exxon on terms and conditions independent of any "advance".  You clowns are so stupid, no wonder the US wanted the PNC in power to do contracts with Exxon.  They know how stupid and short-term you people are.  BJ is way ahead of you clowns.

Stupid people.  No wonder the US installed the PNC just when oil was discovered!

Prices are low, and there is a glut of oil, so I don't know why any expect that Exxon will pay an advance.

Did the US go to the 50%+ of Guyanese and tell them to vote APNU/AFC or else.

Just accept the fact that in 1992 the majority voted for the PPP, and in 2015 the majority tossed them out.

No, 5% and the doctoring of GECOM!

They may, but when oil is $90 Guyana will get comps for $50 and have to pay twice the advance in concessions.  This is what BJ warn about.  I agree with accelerating funding of some key infrastructure, but I say use the lending institutions and not Exxon with whom you need to sit and have tough negotiations!

Base, Stormy has a 99 cent Store.  He cant think big.

The pen is mightier than the sword.  It appears that jagdeo, on a daily basis, is continuing to school those ex PPP nimcompoops and those PNC backwards jackasses. Jagdeo does not have to be the president to run the country because he never stopped and you can take that to the bank.

Bhaiya, ease up on the Limacol.

Caribj is a bit more pragmatic, but Storm is being his usual asinine self, rebuffing anything the PPP says without contemplating for 5 seconds the merits of any point!

At this stage criticizing the PPP wouldn't make the PNC government a better one.    If the government accepts any money from the EXXON corps, they will lose all rights to ownership od the oil fields and a better part of the Government.  The IMF and WB will make mince meat with this Government.  Granger is no Bharat Jagdeo.

I don't think the entire dunda-head PNC bunch sums up to BJ!

The 5% voted for who they wished. 

The Grand Wizard of the Indo KKK screamed daily rants against blacks.  They turned out in record numbers to toss the PPP out. Told you not to take the black and mixed votes for granted.

How will taking an advance of royalties will guarantee ownership of anything?  The only reason why royalties are paid is because Exxon will be using the resources owned by Guyanese.

If you don't understand what the Grand Wizard of the Indo KKK is screaming, then don't repeat it.

What Jagdeo needs to focus on is ensuring that Granger develops a proper package of royalties, incentives, and other financial packages to ensure that Exxon begins to drill, and that it processes as much as it can in Guyana by building the appropriate facilities in Guyana, instead of shipping crude oil to Trinidad.

Jagdeo also needs to ensure that a Sovereign Wealth Fund is developed and that tight monitors are put in place to ensure appropriate use of funds, to ensure that Guyana doesn't become another oil dependent nation.

Countries ask for advance on income in many places. It can ask it in in terms of its lease of the fields or in terms of its royalties. There is nothing wrong with that except from nutjobs like you. BJ should not talk because inevitably he would have done the same thing. It would be spending the nations money and not a loan.

prices werr 30 dollars a barrel when Iraq was invaded for oil as you claim. The Saudi can produce some 20 millions of barrel a day so price is not going up anytime soon. The expectations is to spend given what you have the potential to earn at prevailing prices.

Exxon will pay to retain the lease. The other oil company builds structures, donates to charities, run sports events and never pulled a damn thing from the soil nor do they have a potential well to date. They make money on the backs of speculators. Exxon is a global giant with assets the size of most of the third world combined. Advancing a few millions here or there will not hurt it.

A dollar store is not a bad business to have. However, I do not own any stores. Once I had  5 computer stores. Those are history some 15 years now. My sister  own 3 sporting goods store but I do not participate in it except to help her run them when she wants to take off. I had a bicycle store with friends  and that was mainly to get promotions and have a club house. That still exists but the fellows are into building custom bikes and I am no longer a part of it. I am now employed mainly at the job of being a professional skulker from hard work having worked hard for a long time. I live to do my own thing when I want for as long as I want. 

Exxon is global, so aren't wedded to any region or nation.  If there is an oil glut, and prices remain low Exxon will not drill unless it suits their plans.  Production costs, in comparison to other regions, will be an important factor.

Guyana has no harbor, and no oil  related infra structure and expertise.  Trinidad has it all, and in fact probably benefitted more from exploration related expenditures than did Guyana.

So will Guyana merely request an advance of royalties (meaning of course that prepayment means that royalties decline steeply at the back end)?  I would think that ensuring that as much value added operations were based in Guyana would be a priority, but I haven't heard much of that.

I read frequent comments from T&T sources of their anticipation of benefits from Guyana oil finds.  Apparently Guyana will get royalties (if front loaded, meaning that revenues will eventually decline steeply) while T&T gets the value added processing and spin off services.  So down he road T&T benefits more. That is THEIR plan, and why not if Guyanese are dumb enough not to insist upon Exxon locating value added activities.

Granger should demand that Exxon build a deep water harbor, and a refinery.

You needed to offer your services to those dunda-heads in the PNC Govt.  They operate with a beggar-bowl mentality!

While I share your concern about linking royalties to current prices, which remain quite low, I think that it is equally fool hardy to borrow, based on revenues which might or might not materialize.  Suppose Exxon decides not to drill, in the face of the ongoing oil glut.

A formula should be developed which allows flexibility if prices increase, so that Guyana can benefit from any upside, while not being exposed to the down side.

Fiscal incentives should be in place to entice Exxon to build a deep  water harbor (funded in part with WB/IFC funds) and a refinery, as well as locating their engineering and other oil services in Guyana.  Royalties should be structured to penalize Exxon if all Guyana is used for is as a source of crude, transferred directly to tankers.

Bottom line is that this is quite complex, and it is clear that Granger lacks the full understanding of the complexities of this. Until he does, I suggest that he holds off on negotiating any advanced payment of royalties.  Exxon isn't a funding institution.

I am too young (late 50s) and was never in the GDF, so they will not listen tome.

The lease of the are is per fee. These are renewable per government discretion. I am sure if no oil is pumped the lease is still of value. That is that the other peddles on the penny stock market for income.

Indeed the business of oil is complex. That is why their work force numbers approach hundreds f thousands. The business of oil is all around us but we do not know it. Trying to find out about the business of oil is often prying into the doings of the three letter agencies and often it is.Granger and his entire crew do not have the skill set to deal with these people. They will definitely need to ask the Norwegians for help. They are the only nation on the planet where oil wealth percolated to the people.

It's a very bad idea to ask for money up front when oil price is this low. What if Exxon takes the challenge? Do you really believe Exxon will offer a low discount rate? They will have to take to shareholders a steep discount for an already depressed price. It has nothing to do with "owing you". The PPP was willing to do business with the same oil company.

Granger should focus more on ensuring that there is maximum possible value added processing in Guyana, and maximum possible sourcing of ancillary services.  In fact they should already be trying to get Guyanese trained, to ensure that all the jobs aren't given to Trinis.

He should attempt to understand how the oil/gas industry works before negotiating royalties and fee structures.  The only way upfront royalties make sense is if there is some sort of provision to allow some increase if future prices are higher.

Granger needs to understand that Exxon isn't a bank.

I agree, I was just take the better of the two bads.  I agree that they should not borrow/take advance unless actual commercial drilling starts, at best.  I think though the GoG will have no problem attracting expertise to assist in their negotiation.

rebuffing anything the PPP says without contemplating for 5 seconds the merits of any point!

....words to remember ....very appropriate for baseman when dealing with Obama and his peeps Bush/Trump......

I am not now surprised when the boys here say you play with your wife frilly things. You are into peculiar things that are incomprehensible.

I said the PPP were right on this one but I noted the PPP themselves would have done it. They are greedy that way.

My worry is the government asking for 2 billion dollars with no projects detailed in the pipeline. Further, they will spend 10 percent of that on lawyers and advisers and negotiating team to get the money.

If they do get it then we are well on our way to to the path of a resource curse because this money will see the bloating of government, the rise of a patronage system and the development of boutique projects just to spend money.

If they had detailed plans with budgets and have those in the public forum before the ask, one would say they do indeed have a need for it.

Again, I do not support the ask for money when we do not know if we have sulfurous crude as venezuela or in what quantities or the potential income to us. We should not prime ourselves for  a spending spree for money we do not have. Borrow it from the Chinese if needs be but not this way.

Imagine your wife priming your credit card in hope you get a bonus! But then again you might ask her to buy double portions for you.

It is all dependant on the valuation model and what consideration are applied to the risk of the price rising .

We cannot allow for the offtake agreement to be a fixed-price agreement, it has to have built in triggers that will allow for price adjusters if the price rises.  The challenge with that, is that EXXON will also ask for price adjusters if the price also falls.

This is not something I think Trotman is skilled enough to do or even lead.

This can hurt Guyana really bad if badly structured.

That is my concern. I am sure that they can receive help from an international development agency.