OPINION: Vice President Jagdeo has his tangibles wrong, is wrong about his intangibles, too

Last Updated on Monday, 4 March 2024, 7:42 by Denis Chabrol

by GHK Lall

I noticed that Christopher Ram, accountant and attorney, went to town on Vice President Jagdeo in his March 1st oil column in SN, relative to the issue of a potentially calamitous oil spill.  Aside from the area of asset valuation, as shaky as it was, there was also what the Vice President gave quite a speech on, made merry mockery of the Guyanese people  It had to do with “intangibles.”  I salute the VP for following his lines as seemingly received from Alistair Routledge, a man entrenched here for the long term (probably forever), another man on his way out (John Hess), and still another, not even here yet (Mike Wirth).  Dr. Jagdeo has manifested seeming ignorance on tangibles (Exxon’s local assets and their value, as booked), but there he was waxing at length about “intangibles.”  As usual, I try tirelessly to dig the learned Jagdeo out of the holes he digs for himself.  It is a thankless exercise, but I put my head down, and keep charging ahead like a loyal US Marine.  They don’t call them jarheads for nothing.

In the event of an oil spill, all bets are off, most of them anyway.  What applied in good times, in normal times, all disappears.  What had tremendous value before (goodwill and other intangibles) takes a beating.  An oil spill, no matter what the protective clauses in the 2016 agreement/contract memorialize, indicates at some visceral and cerebral level that there has been failure on the part of the operator/contractor.  More than its competence would be questioned, definitely Exxon’s judgment, and its commitment to safety.  The absence of “reckless disregard” as incorporated in the 2016 agreement may shield it from intent, which limited Guyana would most likely be unable to prove.

In the minds of outsiders and competitors, however, in the crunch time of assets to be disposed of, they are the ones that would have the upper hand.  The sellers in a hurry, the pressure cooker of circumstances, can’t be choosers.  The appointed helpers in what could be a fire sale of distressed assets are limited in the kind of prices reflective of good value that they could demand.  Enron stands as a testimony to that reality.  Similarly, the Wall Street investment banks holding suddenly toxic assets (derivatives and mortgages) 15 years ago found that out in the worst way possible.  Some had to go into bankruptcy.  Some flew, some were pushed.  One week they were on top of the world, the next one, they were on the bread line.  All their big and beautiful accounting records with their grand accounting numbers were not worth the air in a bodily gas expulsion.

In a most uncanny manner, it was the mighty VP himself, who said publicly that the provision of a full parent company guarantee would risk the company (Exxon) having to find shelter under the protection of US bankruptcy provisions, if the worst became reality.  It is why I respect this top banana Jagdeo so much: he is more concerned about an oil company bankruptcy than he is of the bankruptcy of the Guyanese people.  What value “intangibles” then, Mr. VP (sorry, doctor VP)?  When things go to Jagdeo’s head, he prefers not to be seen as an ignoramus, so he flourishes with talk about the market and market driven forces.  That is very good, sir.  But what price would the same market attach to the then whittled down “intangibles” of whichever company operating here, when it has failed, with a horrendous oil spill happening?  I give the honorable Vice President of Guyana, America’s Bear Stearns and Merrill Lynch.  Both were around for a century, like Exxon.  But when the fragments struck the ceiling fan, everybody sat on their hands, or ran for cover.  It was when JP Morgan’s big dog, Jamie Dimon, moved in for the kill.  Meanwhile, Guyana’s top oil dog Vice President Jagdeo is killing Guyanese hopes.  Intangibles become brambles and thistles when a garage sale is on.  All that ole iron out there would be worth pennies on the dollar.  Been there, seen that; watched those who flew like eagles, reduced to the crawling of carrion crows.

Finally, Mr. Alistair Routledge of Exxon Guyana (and Exxon nirvana) would like locals to believe that his company is a paragon of corporate virtue.  Mr. Routledge is a fellow American and a special guest, so I spare him the full blast of my distastes for his Grecian gifts.  Along the same lines, I encourage my fellow Guyanese to peek into the record of Chevron.  It is one that should bring several tremors of shuddering.  This is my bottom line for the likes of glorious Exxon, as made out by Jagdeo, and the splendor of Chevron: they love to rake in the profits of poor countries overpopulated with colored people.  They hate to shell out and pay up when things go wrong.  Check Exxon in Alaska and everywhere else.  Review Chevron in Nigeria, and many other places where it went.  Whether the takeover goes through or not, Hess does not have much of substance to bail Guyanese out, if an oil spill of consequence strikes.

Guyanese had better get a leader who is prepared to go to hell and back for them over their oil and oil spill insurance.  Or they had better get ready for Exxon and Chevron (and the Chinese) to bury them alive, should a disastrous oil spill blow its evil winds here.