Jagdeo reiterates Guyana collects ‘every bit of royalty’ from ExxonMobil

In keeping with the Stabroek Block Production Sharing Agreement, Guyana receives all its royalties, calculated at two per cent, the country’s Vice President Dr Bharrat Jagdeo again assured on Thursday.

Jagdeo addressed the issue at a party press conference last week but said because of an absence of new issues and a failure on the part of some news outlets to correct false reports, it needs to be repeated.

Jagdeo dismissed claims by political commentators Dr. Kenrick Hunte and Christopher Ram that Guyana was collecting a fraction of the royalty and was losing millions annually, as “wild speculation.”

“I addressed this issue last week.

“I pointed out that the calculations were wrong and outlined how the royalty is calculated and then we had this week again Christopher Ram supporting Hunte,” Jagdeo said, noting that too often the government’s time is taken up with responding to “ridiculousness.”

Under Article 15.6 of the PSA under review, ExxonMobil pays a royalty of two per cent to the Guyana Government on the value of all petroleum produced and sold.

Last week, Jagdeo said: “… in Guyana’s case, the FPSOs are operated by gas, so there is no deduction whatsoever. Royalty is calculated on the basis of total production and total sales.”

Jagdeo said it is false that Guyana is receiving 0.5 per cent of royalty and that $73.8 million of royalties are now unaccounted for.

“We collect every bit of royalty.

“These are some of the most ridiculous analysis that pass of as technical work… and they get bold headlines.

“It is all a lie,” a frustrated Jagdeo exclaimed at a press conference held at Office of the President.

Jagdeo explained that there is a process for arriving at the total sales figure and when that is agreed on, mutually, Guyana receives two percent of that total sale, not two percent of the profits.

Royalties are paid quarterly.

Currently, a 10 per cent royalty rate heads the new oil agreement, up from the 2% granted to ExxonMobil for its ongoing exploration and production in the Stabroek Block.

This will apply to new bids for oil blocks.