Author: Christopher Ram

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Routledge’s black hole of mysterious tax certificates (part 1)

Every Man, Woman and Child in Guyana Must Become Oil-Minded (Column 171)

Introduction

Readers will recall Column # 170 dealing with the request by three U.S. senators to ExxonMobil seeking information on the company’s tax arrangements under the 2016 Petroleum Agreement. Their direct concern is whether the U.S. treasury is subsidising Exxon’s operations in Guyana to the benefit of CNOOC, one of Exxon’s Chinese partners in the Stabroek Block.

Ever since that letter was made public, interest in the issue has intensified – both abroad and in Guyana. At a press conference held at the Exxon’s new Guyana Headquarters in suburban Ogle, hosted by ExxonMobil Guyana’s President Alistair Routledge – sporting the Guyana Arrowhead – the local media, sensing a story that finally had a Washington connection, pressed for answers.

To a question whether Exxon would provide the information sought by the senators – and long sought by the media in Guyana – Routledge was his typical evasive self. “We haven’t applied any tax credits. We are working with the GRA on paperwork on taxes,” Routledge said – an insult to the intelligence of every Guyanese or person of any intellect. That single sentence has opened a window into what may be the most brazen accounting fiction in the country’s history. Unless there is an intent to cook up something, the claim is neither accurate nor credible. It masks a structure so distorted that even its defenders cannot explain.

Before we analyse his response however, let us look at another statement that is blatantly misleading – that the company continues to be cash flow negative on a cumulative basis. Was Routledge unaware that in 2024, the branch distributed some $674,454 Million and still ended the year with more funds than at the beginning of the year? 

No credit

Back to the press conference and Exxon’s and its tax practices. Unsurprisingly, Routledge tried to dismiss the drawn-out controversy as the product of paperwork. But what paperwork, he did not say. The Agreement could not be clearer. The Minister pays. The GRA issues the receipt. The obligation is discharged. That is the entire mechanism. There is no “working on paperwork.”

There is only doing it or concealing it. If, six years after first oil, the parties are still fumbling with “paperwork,” it means either the Agreement has not been executed as written or it has been executed but hidden. Either way, it is a national embarrassment.

Accounting credit

While Routledge performs confusion in public, the financial statements of ExxonMobil Guyana Ltd., Hess Guyana Exploration Ltd., and CNOOC Petroleum Guyana Ltd. tell a different story – they are all taking the credit.

ExxonMobil Guyana Ltd. (2024) reports: “Revenue includes non-customer revenue of G$260,155.7 million … relating to Article 15.4 of the Petroleum Agreement,” and recognises a matching income-tax expense. That is the classic gross-up accounting technique: record fake revenue and fake tax so the books look balanced.

As for Hess Guyana Exploration Ltd. (2024), its financial statements disclose that “A portion of gross production … is used to satisfy the branch’s income-tax liability and is recognised as sales revenue.” The Government’s oil becomes the company’s “revenue” and its “tax.”

As for the junior, non-American Chinese partner, CNOOC Petroleum Guyana Ltd.’s financial statements go even further, stating that “The Minister accepts the appropriate portion of the Government’s share of profit oil as payment in full of the Contractor’s income-tax liability.” That language does not reflect Article 15, which requires the Minister to pay the tax to the Commissioner-General of the GRA – not merely to “accept” oil.

Amazingly, in a matter as important as this, none of the companies thought it useful, let alone necessary, to disclose this little inconvenient fact.

The black hole

In all three cases the same pattern appears: the companies book the tax as paid, recognise it as revenue, and enjoy the credit. What happens thereafter is the black hole where Mr. Routledge wants to take us, despite the clear language of Article 15 of the Agreement: The Minister must pay to the GRA the tax charge of the oil companies out of Guyana’s share of oil, is said to pay, the GRA is to issue receipts and deliver “proper tax certificates in the Contractor’s name”.

Article 15 states that the tax must be paid from the Government’s share of oil revenue. Where, then, is the evidence of that payment? The Natural Resource Fund shows no deduction, no debit, no outflow. But no one – including the NRF investment committee and the auditors – seem to care a hoot.

In effect, the tax exists only in the companies’ ledgers — not in Guyana’s public accounts. A phantom transaction generates a real benefit to the contractors, while the Government works on a certificate for a payment it never made.

Confusion

This confusion is not accidental. The Government’s failure to manage the Agreement – or even to understand its workings – has produced a system in which no audit has been completed, no receipts have been verified, and no public officer can explain the basic arithmetic of the contract.

The Commissioner of Information, who falls under the Office of the President, has ignored lawful requests for disclosure. The Minister of Natural Resources has neither published the tax receipts nor accounted for the debits from the Government’s share of profit oil. And nothing coming out from the Guyana Revenue Authority, to suggest that it has received the taxes “paid on behalf of the contractor”. This is the contract that is so sacred that it even trumps the country’s sovereignty, public officials’ integrity and most of all, the President’s thundering commitment to review and renegotiate”.

Even a cake shop, run on a basic exercise book and a lead pencil, would manage its accounts with more care than this trillion-dollar industry. The result is a charade: a government pretending to pay, companies pretending to be taxed, and auditors pretending not to notice.

Next week we will leave Georgetown for Houston, Texas and New York, where the parent companies of Hess and Exxon grapple with the accounting equivalent of the three-card trick outside of Demico House.

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EU observers report offers no endorsement of credibility, let alone free and fair

Dear Editor,

In a response to comments made by the Canadian High Commissioner on the final report of the European Union Election Observation Mission, President Irfaan Ali described the September 1st elections as “free and fair, beyond a shadow of doubt,” and that they were conducted “efficiently and reliably.” While the President is entitled to his view, he must appreciate that elections do not become credible merely because a participant proclaims them so.

Notably, the EU carefully avoided using the term “free and fair”, a descriptor which has been replaced by “credible”, when an Elections Observer Mission considers that an election meets basic democratic thresholds. Its report was professionally prepared, evidence based, each finding was supported by tables, graphs and charts based on thorough and objective observations and facts. By contrast, the President offered none. Ali’s own abuse of his office in the pre-election period was egregious and well documented. His party’s misuse of the State media, its apparatus and resources meticulously documented in the EU’s report, was evident to all.  

President Ali had no reservations when the EU Mission issued almost identical recommendations in 2020 – very, very few of which have been implemented. It is worth noting too, that despite being a constitutional body, GECOM is not subject to a dedicated financial or performance audit. This is an extraordinary omission for an institution that now absorbs billions annually and is dormant for the greatest part of five years.

It is equally difficult to reconcile claims of “efficiency” with an electoral system that is, by every measurable standard, the most expensive per voter in the world. Guyana continues to spend unprecedented sums to maintain an oversized electoral machinery, yet many of the structural weaknesses identified by both international and domestic observers after each elections remain uncorrected.

GECOM has unilaterally concluded that statutory provisions on election-expense reporting have “fallen into disuse.” In other words, GECOM, which should carry out the law, casually ignores and disregards it.

The voters’ list remains inflated by the names of persons long deceased, even as the law provides for continuous cleansing. The constitutional and statutory requirements regarding Commonwealth citizens have, by GECOM’s own admission, been wrongly applied, with the result that ineligible persons voted in the elections.

The WIN party, which had previously donated tens of millions of dollars to Ali’s PPP/C, encountered hindrances to their participation in the 2025 elections, once it became clear that it posed the greatest threat to the PPP/C.   

These are not markers of efficiency or credibility. They mark institutional drift, weak compliance with the law, and a tolerance for practices that heighten cost and undermine democracy. Public confidence is earned not through political declarations but through transparency, accountability, and the consistent application of the law.

The EU Mission’s report offers no endorsement of credibility, let alone free and fair. Its silence speaks louder than any political rhetoric or reassurance.

Yours faithfully,

Christopher Ram

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Routledge deserves to go!

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 172

Introduction

Last week’s column described a statement made by Alistair Routledge, President of Exxon’s local subsidiary, as “blatantly misleading.” As I begin today’s column, let me quote another statement he made at the same press conference: “…you will recall that, prior to 2023, we were not making profits here in Guyana.”

It genuinely pains me to demonstrate – by the company’s own audited figures – how inaccurate that “factual” statement is. In truth, Exxon recorded profits of G$132 billion (2021) and G$637 billion (2022). See below the cropped screenshot of the Income page issued by the company’s local statutory auditors.

It is the same income statement which directs readers to a note about the provision in the Agreement regarding the inclusion of the tax charge in revenue and a below the line equivalent deduction made purely to balance the books and to conceal the true nature of the fictitious transaction.

My anguish at the sell-out of Guyana’s patrimony under the 2016 Petroleum Agree-ment – worsened by the secretive Bridging Deed that extended Exxon’s rights without parliamentary scrutiny and by the padding of over US$92 million in pre-contract costs – explains my low opinion of Exxon as a corporate citizen. After the repeated distortions and evasions of its Vice-President for Finance, Mr. John Colling, and now Mr. Routledge, I can only conclude that Exxon’s corporate culture has been corroded.

For his serial misrepresentations to the Fourth Estate, Mr. Routledge has lost the confidence and respect of his hosts. Under his watch, ExxonMobil Guyana has resisted transparency, delayed relinquishment, and overseen the improper reduction of US$211 million in disallowed audit costs. In the United States, an executive facing such mistrust would have been summoned before Congress or shown the door. In Guyana, he remains a guest of honour.

Both American contractors in the Stabroek Block claim income-tax deductions while grossing up revenue to balance their accounts – a fact clear from their own financial statements. Yet Mr. Routledge insists, “We haven’t applied any tax credits. We are working with the GRA on paperwork on taxes.” What does that even mean? And is it true? Are these not the same statements used in Exxon’s consolidated accounts? 

From Guyana to the USA – via Europe 

In Column 171, we promised to trace those tax certificates to Houston and New York, where Exxon and Hess file their stock exchange reports. Like Banks DIH’s payments to Europe routed through Miami, tax considerations make Exxon’s journey far longer than necessary. Let us now begin with the understanding of a process which starts with the preparation of the oil company’s tax return, followed by the issue of a receipt and a proper certificate in the name of that company. These two contractual requirements are designed to enable Exxon and Hess to claim tax credits in their home country.  

Our next stop is The Bahamas, where Exxon keeps the Caribbean parent of its Guyana operations. The Bahamas, a tax haven with strict financial secrecy, serves as a safe harbour between Georgetown and Europe. From there, the paperwork crosses the Atlantic to Breda, in the Netherlands, home of ExxonMobil’s European headquarters. And that is when the journey gets choppy. 

According to independent investigative reporting, Exxon’s international tax structure is a master class in concealment. Profits from Guyana are booked through intermediate entities in The Bahamas, the Netherlands, and Luxembourg before reaching Texas. Each jurisdiction shields a layer of income, ensuring that neither Guyana nor the United States ever sees the full picture.

The voyage then continues to Luxem-bourg for further fiscal engineering via specialised vehicles. Through this narrow vein, the oil’s monetary value is metabolised until its tax content all but vanishes before crossing the pond westward to Irving, Texas, where ExxonMobil’s headquarters consolidate the accounts of hundreds of foreign affiliates.

This web of subsidiaries and partnerships is designed for one purpose: to feed Exxon’s insatiable appetite to get the last drop of blood – post profits – from what a former Chevron finance director and now a Columbia University lecturer, described as “the most favorable contract I’ve ever seen”. The fiscal transfusion that begins with an unsubstantiated GRA tax certificate ends with an IRS tax credit, reducing Exxon’s U.S. tax bill at Guyana’s expense.

Making rings around the fenceless Guyana

The supreme irony is that while Guyana refuses to require ringfencing of exploration from production activities – the most basic practice in the oil and gas industry and a staple in accounting – ExxonMobil engages in tax ringfencing in an elaborate lattice of subsidiaries across continents to protect the profits they extract from Guyana 24/7/365.

The tragedy for Guyana is that the talent pool controlling the oil sector refuses to learn, hiding behind the absurd claim that only elected officials can be trusted to manage it. This is the same Government that once promised an independent Petroleum Commission – another broken pledge. After five years, not one audit has been completed and relinquishment took a year to enforce, though both are clear obligations under the Agreement. In Parliament they even argued that a professional Commis-sion would cause duplication and delay – proof enough that these ‘elected members’ would be challenged to run a cake shop.

Their contempt for professional oversight shows in the farce of the ministerial audits, where handpicked auditors are valued more for loyalty than competence. That is not all. As one Minister told the National Assembly, “We decided at this point in time not to give this power to non-elected people in a commission… non-elected people are in a commission because you cannot hold them answerable.” The irony is lost on them: Guyana is in this unholy mess precisely because of elected members.

Exxon applies tax ring-fencing with surgical precision, while at home our officials reject operational ring-fencing altogether, allowing costs from one field to be charged to another and deferring higher profit oil for Guyana – even as rising output is offset by falling prices.

Conclusion

For all of Routledge’s verbal meanderings and misrepresentations, the resolution of the tax certificate mystery will harm and embarrass Guyana more than it does Exxon: properly applied, those certificates will drain the Natural Resource Fund, our inter-generation sovereign wealth fund.  

What appears to be a technical or accounting puzzle is, in fact, the product of misguided/non-existent policies, fragile institutions and misplaced loyalties. The asymmetry between the sharks of Exxon and the sardines of the PPP/C government – an analogy with which the ideologues are all too familiar – is profoundly striking.

Until Guyana recognises that sovereignty is the essence of nationhood, that professionals are bound to codes, standards and values, that competence will always trump loyalty and that politicians and elected officials are of no higher quality morally and intellectually than trained professionals, Exxon and their experts will continue to treat our leaders as no more than functionaries in a distant oil colony.

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A blow to fiscal transparency

Business & Economic Commentary by Christopher Ram

Introduction
Today’s column notes the absence of the 2025 Mid-Year Report required under Section 67 of the Fiscal Management and Accountability Act (FMAA), a vital part of the financial and governance architecture of Guyana. Section 67 of the FMAA requires that the Minister of Finance, within sixty days after the end of each half year, to prepare and submit to the National Assembly a mid-year report. The contents of the report include the actual versus the budgeted fiscal performance, an update on projections, and a statement of measures proposed by the government.

The 60-days deadline passed since the end of August and is now more than six weeks overdue. From all appearances, the report has been an unintended casualty of the dissolution of the Twelfth Parliament, the September 1 elections, and the delayed convening of the Thirteenth Parliament. But this omission is not some clerical oversight. It is a breach of the law and a blow to fiscal transparency. As an official publication, it could have been issued under the authority of the Official Gazette. Creativity is in making things happen – not in how to circumvent the law with impunity.

The duty imposed by section 67 is on the Minister – not on Parliament. The Act is silent on the dissolution of the National Assembly, but silence does not suspend the obligation. Nothing prevents the Minister from completing the report within the legal timeframe and making it public, even if formal tabling must await the Assembly’s reconvening. Accountability should not pause because Parliament is asleep. Elections may suspend politics; they do not suspend the law.

Guardrail of accountability and democracy
Inexplicably, and despite an impressive and expansive agenda, nearly seven weeks after the elections, President Ali has failed to convene Parliament. It is hard to believe that a Party with an enhanced majority would stretch this dormancy for the full period allowed under the Burnham Constitution – as they used to like describing our founding document. By the time the Mid-Year Report is finally tabled, the fiscal year will be almost over, and the report’s purpose and functions destroyed. A mid-year report published at year-end is a contradiction in terms. It becomes historical trivia rather than a management tool for mid-course correction.

Paradoxically, the September elections made the timely availability of the report of greater importance in making a more informed choice. Its availability would have allowed citizens to compare the latest performance of actual with budgeted revenues and expenditures, assess the economy’s direction, and the government’s financial management. Contesting parties would have had a clear and timely picture of the country’s finances and the conditions they would face, if elected. Without it, everyone was operating in the dark, a dangerous place to be in an election year when spending pressures and political temptations intensify.

No technical lapse
Bad as that was, the continuing delay in making the report available has broader implications. The government’s failure to observe even the most basic fiscal reporting obligation is no longer a technical lapse: it forms part of the quiet dismantling of democratic and governance guardrails that has been taking place for some time now. When governments ignore statutory duties, when Parliament sleeps, and when oversight bodies choose silence, the architecture of accountability collapses, gradually but inexorably, until barely the shell of a frame is left standing.

We note too that the half-year report of the Bank of Guyana is also outstanding for this year. The Bank of Guyana Act requires the Bank to prepare and transmit a report for that half year to the Minister of Finance. Exercising its operational independence, the Bank ought to consider itself free to post the report on its website as soon as it has sent the original to the Minister. It is not required to get the Minister’s approval, particularly if such approval is conditioned for the wrong reasons.

If one assumes that the Bank has met its statutory obligation regarding the half-year report, the omission by the Minister takes on a greater significance. It makes his duty all the more pronounced. 

It would be good too, if the Guyana Revenue Authority and the National Insurance Scheme, which both fall under the Minister of Finance, were to follow good practice in tabling annual and mid-year reports promptly. Accountability cannot be selective, or one-sided. A government and statutory bodies that demand compliance from the public on pain of penalties must at least obey the law, and desirably, follow good practice. If Parliament permits open breaches without consequence, it becomes complicit in executive lawlessness.

The Government of 2020 – 2025 remained in place following dissolution, functioning quite normally. The Minister remained the Minister, enjoying the full benefit of his technical and administrative staff responsible for the report’s preparation. If the Government takes accountability seriously, then there can be no excuse for the omission.

Conclusion
The overlap of Parliament and the executive means that Parliament behaves like an adjunct of the executive. It should be free to call out Ministers and public officers, even of statutory bodies, who breach their statutory obligations. It is an indictment of public sector management of this country that persons can fail egregiously in complying with the law and the performance of their duties but face no consequence.

Irony of ironies – the de jure Minister of Finance is the President himself. Dr. Ashni Singh is the minister responsible for finance in the Office of the President. What a confused state of affairs we face. How this confusion is resolved is anyone’s guess.

Notwithstanding, the publication of the mid-year report is a necessary start. And oh, the report on the 2022 Census!

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Tightening exchange controls – not forgetting the past

Business & economic commentary

The President’s recent announcement of a series of foreign-exchange measures has drawn wide attention, including a Stabroek News article quoting newly elected APNU MP and businessperson Terrence Campbell and the writer of this column. While some question why such an initiative came from the Head of State rather than the Minister of Finance or the Governor of the Bank of Guyana, the more rational interpretation is that it reflects how seriously the Government views the currency situation. In an economy buoyed by petroleum revenues yet facing persistent shortages of foreign exchange, the measures are clearly intended to restore order, discipline, and confidence.

This column shares those objectives. Foreign exchange leakages, under-invoicing, tax evasion, and parallel-sector markets are real concerns. The issue is whether the instruments chosen are a knee-jerk response or carefully designed to achieve results without reviving the inefficiencies of an earlier era. The law of unintended consequences often causes such measures, if poorly grounded or unevenly applied, to produce results opposite to those intended.

A question of balance

The actual operationalising of some of the measures will require amendments to existing law and, in some cases, may clash with current statutes. But for reasons neither apparent nor desirable, the President seems in no hurry to convene the Thirteenth Parliament. In other words, without statutory force, some measures are open to challenge, though it is doubtful that any businessperson would be so brave.

At the heart of the new regime are extensive reporting requirements. Importers must now provide invoices and Bills of Lading to their banks, which will share them with the Guyana Revenue Authority and the Bank of Guyana for verification. Travellers taking foreign currency abroad must declare the source of their funds, and credit cards are to be used strictly for personal purposes. Individually, these steps may appear reasonable and necessary; together they represent a shift from long-tolerated practice, to bureaucracy and control.

To the uninitiated, the reappearance of multiple layers of approval in an oil-rich economy may seem paradoxical. The intention is to tighten oversight, but it can just as easily invite delay, discretion, corruption, uncertainty, and – heaven forbid – currency flight.

The other side

To the experienced, danger lurks not only in the laissez-faire economic management of recent years but also in weak fiscal foundations. By failing to address the tax provisions of the 2016 Petroleum Agreement – under which the State pays the oil companies’ taxes from its own share – Guyana’s tax-to-GDP ratio has fallen sharply. This loss of capacity has forced greater dependence on borrowing and reduced the tools available to manage volatility.

Decades ago, planning was relegated to the back seat, and since 2020, the Ministry of Finance itself lost its status and independence, folded into the Office of the President, with a preference for populism over fiscal rectitude. Conflicting policy signals – such as uncertainty over further cash-grant schemes, including non-residents – add to the confusion between generosity and sustainability.

Some measures may also conflict with the Investment Act 2004, which guarantees investors non-discriminatory treatment and the right to repatriate capital and profits freely, and with the confidentiality provisions under the Revenue Authority Act and the banker–client relationship. Oversight must never come at the expense of legality; fairness is better served by clear law than by executive fiat.

Asymmetry

The new rules reveal a structural imbalance. Under Article 22 of the 2016 Petroleum Agreement, ExxonMobil, Hess, and CNOOC enjoy fiscal and exchange-control stability, protected from any new laws restricting transfers or profits. The nine measures therefore apply mainly to other importers, manufacturers, and traders. Many ask why they should play by the rules when the key players in the economy are treated with an annual bonanza.

After the announcement, the President was celebrating the opening of yet another fast-food outlet – Wendy’s – that will no doubt be a major user of foreign exchange, in royalties, raw material, packaging, etc. A government cannot credibly lament shortages while simultaneously expanding outlets for its export.

Echoes of the past

Older Guyanese will remember the External Trade Bureau of the 1970s, created by then Prime Minister Forbes Burnham, to allocate foreign exchange and “rationalise” imports. It soon displaced the market, approving the favoured, delaying the rest. What began as order ended in scarcity, corruption, and a thriving black market. See article on underground economy one.

The Bank of Guyana, pivotal then as now, spent resources stamping passports for fifty dollars while its wider role languished. At the same time, the wealthy and technologically adept have migrated to digital channels. For the sophisticated and the barons, cryptocurrency, electronic wallets, and offshore platforms have replaced the briefcases and cambios of the past. The underground economy has gone online.

Conclusion

The measures announced are well-intentioned and motivated by genuine concern for stability. Yet intent cannot replace legality or consistency. The Investment Act, the Bank of Guyana Act, and the Revenue Authority Act all require that policy be exercised through law, not discretion.

Guyana has here before. Not with oil, but with measures rooted in good intention, corrupted in practice, and resulting in catastrophe from which it took time and pain to recover. The challenge this time is to learn from that history. Stability will follow not from tightening control but from strengthening law, planning, and building trust.