Author: Christopher Ram

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Norton’s resurgent APNU and Mohamed’s challenge for the Presidency

Dear Editor,

The PNC is dead. Long live the PNC. As Hoyte did in 1992, Aubrey Norton repeated the show of its party’s resilience on Sunday evening with a huge turnout at its 2025 elections campaign launch at the Square of the Revolution. It must trouble the PPP/C that for all its confidence from endorsements from recent members of the APNU/PNC, from several cash grants with promises of more to come, from the convenient attendance of tens of thousands of part-time workers at its events, and the demonising of David Hinds, that the PNC-R, or APNU could attract such a crowd.   

Regardless of what many thought and still do of Norton, he is the leader of a huge segment of the population that the PPP/C sees as a commodity open to transaction, provided they stay in their place. Treat Norton with disrespect and you disrespect all the 217,920 persons who voted for the PNC and their young children who have now reached voting age. The word is that Norton has his own autocratic inclination but one thing for sure, the Government will not be run from Congress Place.  

Norton’s choice of Juretha Fernandes, a young Amerindian woman from Bartica, the holder of a BSc in Economics and MSc in Public Administration as his prime ministerial candidate, is an inspired choice for many reasons – gender, ethnicity, substance, competence, independence and integrity. By contrast, PM Mark Phillips is appointed with an unmountable dark-tinted glass ceiling placed before him, with its own shade of racism. In fact, even as the constitutionally prescribed first Vice President, the PM struggles to make it into the inner cabinet of five.  

Fernandes immediately placed on the front burner the relentless rise in the cost of living over the past four years to which the Government’s only response were periodic cash grants rather than adequate management. It appears that the PPP/C fails to realise that without other measures, cash grants drive the cost of living higher still. 

It was also good to hear that the Ticket will act on the Access to Information Act, a fundamental pillar of democracy and good governance, another guardrail torn down by the PPP/C. Addressing this pillar will make the society more open, more democratic and more vibrant.

The Ticket made some expansive promises on Sunday night, premised on higher petroleum revenues. The Ticket will need to rely on more than production. Guyanese need to hear from Norton and Fernandes whether they are committed to holding a commission of inquiry into the 2016 Agreement as a prelude to its renegotiation.

The PPP/C might be glad that the two main speakers did not raise the issue of the 2016 Agreement for which Bharrat Jagdeo before the PPP/C took office in 2020 had used the words “they sold us out”. The only thing that has changed is that Jagdeo has gone from being a critic of the Agreement, which lasts until the late 2050’s, to being an enabler. Yet, Exxon, Hess and CNOOC have begun taking money out of Guyana. Jagdeo and Ali no longer seem to care that the so-called profit share from oil is barely enough to pay the very taxes owed by the oil companies themselves, and to build the roads and infrastructure needed for those same companies to extract our most precious economic asset.

However, the PPP/C might care to respond to the Launch, it showed that Norton leads a party and a Ticket that has the capacity to organise, mobilise and galvanise its support base. The consolidation of those constituencies represented by Norton, Fernandes, Hinds and others will pose a serious headache for the PPP/C. It might even have to wonder about the point about all those handouts, cash grants and ribbons cutting.  

Then it faces a challenge from Azruddin Mohammed, scion of a wealthy Muslim family. From financier to political competitor and rival for the presidency, young Mohammed has created a buzz – which maybe only Walter Rodney ever matched – potentially shaving votes from two historically solid PPP constituencies disillusioned by the status quo – the Muslims and the Amerindians. 

That is a headache which the PPP can ill afford. Its response in having its supporters and part-time workers disrupt Mohamed’s meetings in the presence of an unresponsive Police is counter-productive and dangerous. The last thing Guyana needs now is even the suspicion implicating the PPP/C in political violence, such as the Mon Repos market incident.

As other issues regarding the PPP/C’s management are placed under the microscope, such corruption, the gas to energy project, its treatment of NIS retirees, and landowners whose property has been acquired at well below market price, the political tide will ebb and flow.

In Guyana we always think that our politics is unique. Yet, the words of former British Labour Prime Minister Harold Wilson that “A week is a long time in politics”, seem to apply with dramatic force to Guyana. 

Sincerely,

Christopher Ram

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Business Commentary Part 29: GuySuCo Part 2: Slogans do not change reality

Business and Economic Commentary By Christopher Ram

Introduction

Part 1 looked at the contrasting visions of President Irfaan Ali and Mr. Paul Cheong, Ali’s choice for CEO of the beleaguered state-owned GuySuCo, articulated within weeks of each other. As Chief Executive Officer, Cheong unveiled a seven-point plan for the sugar industry, announcing a bold 2025 target aimed at – implausibly – doubling sugarcane yield and securing the sector’s long-term sustainability.

President Ali’s vision seems to change with every pronouncement, his latest being diversification into rice, corn and cassava. In 2020, we heard that Dubai would partner with Guyana to revitalise the industry and make it profitable. Then we heard it would be the Indians, then the Cubans, then the Brazilians. Last year, Ali told the Caribbean Investment Forum that Guyana aims to supply all the sugar the Caribbean needs within two years. A few weeks ago, the slogan was to “make sugar great again” – even as corn, rice, and livestock were added to the mix, as if sugar skills were somehow automatically transferable. These are head-spinning changes that are too difficult to make sense of, let alone implement.

Shuttered estates

We should not forget the overriding 2020 elections campaign promise, repeated by the newly appointed Minister of Agriculture when he announced the appointment of a turnaround specialist as CEO to lead the Conditional Survey ahead of reopening the shuttered Enmore, Rose Hall, and Skeldon Estates. That CEO has since moved upwards, production has moved downwards, and confusion all around. The reality is that since the PPP/C returned to power in 1992 – with a break of five years of the Coalition – GuySuCo has staggered along in crisis, surviving only because of costly, endless bailouts.

Sugar has been in decline for decades. The Parvatan Commission of Inquiry traced GuySuCo’s production history back to 1940, when the industry produced 155,800 metric tonnes of sugar, rising to 327,400 tonnes by 1960. Between 1960 and 1981, production regularly topped 300,000 tonnes, with only six years falling below that level. But the decline was already set in motion: between 2005 and 2015, production never crossed 230,000 tonnes. Then came the dramatic slide – by 2024, production was down to 47,130 tonnes, and the first crop of 2025 fell to just 15,000 tonnes.

The gambler

Ignoring Kenny Rogers (Know when to walk away, and know when to run), the government keeps pouring good money after bad. It is estimated that the sugar industry has cost this country about one hundred billion dollars over the past decade – and that is a conservative figure, ignoring hidden subsidies, debt write-offs, free land, and all the opportunity costs of what that money could have built instead.

The repeated justification is that thousands of rural workers depend on sugar. In fewer and fewer communities, that remains true – but the reality is that many traditional workers have little appetite for this backbreaking, low-paid work in today’s Guyana. The fact is that even the reduced industry is facing a labour supply crisis – the younger generations, mostly Gen Z, want modern, less punishing livelihoods. They have not gone to school to become cane cutters, by whatever name called. Low recruitment rates are worsened by persistent absenteeism. It means that the promise of “protected jobs” has become more political than practical.

Meanwhile, the industry’s governance remains a structural weakness. GuySuCo is kept on life support by taxpayers but remains under political control – the government appoints both the Chair and the CEO. This ensures that every major decision is at best a political compromise, not a sound business choice. The Parvatan Report’s blunt assessment – that the government’s heavy hand prevents real turnaround – has proved accurate year after year.

The perpetuator  

No amount of money or slogans will solve this. With oil money flowing, only the return of the PPP/C in the September elections will ensure this irrational cycle of promises, wasteful spending, and poor performance continues. It is an expensive pattern that Guyana cannot afford forever. A new administration genuinely committed to sound economics, independent management and fiscal responsibility must break the cycle.

The opportunity of windfall oil wealth does not erase basic economic truth. For every billion dollars spent to prop up GuySuCo’s outdated model, billions are diverted from roads, water, schools, hospitals, technology training, rural diversification and transport – all increasingly urgent needs. The opportunity cost is vast and must not be forgotten, even though it is rarely stated plainly.

The problem solver

There is a way out. The PPP/C did not reopen the estates, and its supporters went about their lives. It can do what the Coalition once did – face reality. A credible first step would be to establish an impartial Commission of Inquiry to recommend on the remainder. Estates that are structurally unviable must be formally and permanently closed. Viable assets must be opened to credible, well-regulated private investment, with binding safeguards for workers and communities. Large sections of estate lands should be transferred or leased to workers, communities or co-ops who can diversify into rice, corn, cassava, livestock or modern agro-processing – matching today’s workforce, not the workforce of the 1940s. The entire corporation must be run by an independent, professional board, free from the revolving door of political patronage. Workers must also have real transition pathways – upskilling, alternative livelihoods, and proper support for those who want to move on from the cane fields.

If the government is serious about rural development and food security, it must stop confusing emotional slogans with economic truth. “Making sugar great again” will not work if we continue to pretend this failing model can be fixed by pouring in more taxpayers’ money.

Until GuySuCo’s fundamental flaws are faced honestly, the same bitter pattern will repeat: more bailouts, more promises, and no real answers.

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For the Good Times

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 163

Introduction

Following part one of this column, which was taken up by Kaieteur News, the Ministry of Natural Resources issued a defensive statement attacking the newspaper for questioning why ExxonMobil reported US$10 billion in profits while Guyana received only US$2.6 billion. Logically, as equal profit-sharing partners, Guyana should receive the same amount in profit oil as the companies combined.

Promoting the interest of the oil companies, the Ministry deflected from this accounting irregularity by attacking the newspaper’s competence rather than addressing the legitimate concern. The source of the statement is unclear but its objective is certain: to restore credibility to the government which could offer no explanation but only “a formula”. By putting that statement on its website – the Department of Public Information – the Ministry, the Government and its mouthpieces has done themselves no favour. 

Let us dissect that profit share allocation.

The facts

Here are the facts: There were 225 oil lifts in 2024. Four went to Guyana in the form of in-kind royalties and 56 went to profit sharing (Government 28 and Oil Companies 28). That leaves 165 lifts, all of which went to the oil companies for cost recovery. The oil companies did not tell us this breakdown, nor did the Government – which probably did not try to find out. This information comes from scouring the Bank of Guyana’s Natural Resource Fund reports and the Minister’s Budget Speech.

At approximately $80 million per lift, those 165 cost recovery lifts represent roughly $13.2 billion in value flowing to the companies. From analysing their financial statements, we can determine that only 22 lifts ($1.8 billion) went to actual current year expenses, while a staggering 143 lifts ($11.4 billion) represented recovery of prior years’ costs. It is worth noting too that expenses included a significant element of non-cash expenses as well, such as decommissioning, amortisation and lease provisions. 

The numbers become even more puzzling when we consider that despite receiving only 28 lifts ($1.9 billion) as their legitimate profit share, the companies reported over $10.4 billion in profits in their financial statements – more than five times their actual profit oil entitlement. This suggests a troubling pattern where massive historical cost recoveries are treated as current profits, a fundamental distortion that demands immediate investigation, attention, transparency and disclosure.

The Accounting Rules

Guyana is an IFRS subscribing country and companies operating here should provide information to enable a reader to understand and appreciate the numbers. Yet the 2024 financial statements of the oil companies create more confusion than clarity. Under IFRS, the principle of transparency demands that financial statements provide a true and fair view of a company’s financial position and performance. Readers should be able to understand the source of revenues, the nature of expenses, and how profits are generated. Yet when we examine these oil company statements, we find a labyrinth where massive cost recoveries somehow contribute to profit calculations without clear explanation of how historical reimbursements become current earnings.

The fundamental question becomes: Are these companies meeting their IFRS obligations to provide clear, understandable financial information? When a company receives $11.4 billion in cost oil recovery but reports this in a way that inflates profits to $10.4 billion – while their actual profit entitlement is only $1.9 billion – something is seriously wrong with either their accounting practices or their disclosure standards.

IFRS requires that companies explain material transactions and their impact on financial performance. Yet nowhere in these statements do we see adequate explanation of how the petroleum sharing agreement works, how cost recovery differs from profit generation, or why reported profits bear no relationship to actual profit oil received. This is not a matter of disclosure – as important as that is. It is an attempt to distort and deceive. it’s a fundamental failure to meet international accounting standards that Guyana, as an IFRS jurisdiction, should be enforcing.

Warped Accounting Practice

It defies any logical, decent accounting rule that Exxon and Co would recognise hundreds of billions of Guyana dollars in deferred tax liability which they will never pay but refuse to recognise on their books expenditure the recovery of which is guaranteed by the Agreement. Just think about the boldness of their position. They carry massive deferred tax liabilities on their balance sheets which they know they will never pay since these taxes are paid out of Guyana’s generous cost recovery and tax certificate mechanisms. Yet they forget basic accounting principles when it comes to their guaranteed unrecovered costs.

The general rule of accounting is that expenditure incurred in one period to be recovered in a future period, even in the absence of any contractual arrangement, is recognised as assets. Even that part of the motor car insurance premium that covers months into the next accounting period is treated as a prepayment in business accounting. The 2016 PSA makes cost recovery a contractual right, not a discretionary hope. Yet these companies treat guaranteed cost recovery as uncertain while booking tax obligations they will never pay as concrete liabilities. Had they applied that principle, they would have treated the recovery as the exchange of an asset (cash or oil) for another asset (recoverable costs).

This double standard allows them to inflate current profits by treating cost recoveries as immediate revenue while hiding the true ongoing impact of future recoveries on Guyana’s oil revenues. When companies selectively apply accounting standards based on what makes their numbers look better, that is not compliance – it is flagrant and deliberate manipulation. Both the Coalition and the PPP/C have failed to recognise the avarice of Exxon and its partners, signalled when, at the very beginning, they overstated pre-production costs. Or when the local books failed to account for the proceeds of sale of interest in the Stabroek Block.

What the oil companies are expecting is that all Guyanese – and indeed Yahoo Finance, Reuters, Bloomberg and shareholders will believe that all these billions of barrels of oil come at no cost – or, in the case of Exxon, by mainly Depreciation and amortisation which accounted for 63% of its total operational expenditure in 2024, up from 51.2% in 2023. There’s the well-known saying that there is no such thing as a free lunch. Our oil companies have profits free from of any cost of sales.

It gets better

Sometime in 2057 when the wells run dry and Exxon has departed, maybe pocketing the Decommissioning Fund on the way out – the next generation will ask, who is it that signed that Agreement and why did no one call it for what it was: the rip off of the century? Or why did no subsequent government think of changing that abomination? In fact, the PPP/C has made Trotman look naïve. By failing to impose permissible ring-fencing, we are now financing our very exploiters. Not even the enslaved or the indentured workers would have tolerated that. Guyana now helps to finance our own exploitation. In 2023 and 2024, we co-financed G$114 bn of Exploration Expenses, we split the non-cash accumulated depreciation charge, Asset Retirement Obligations and Lease Liability, all amounting to over $700 Billion. See the table below.

NB: Depreciation, depletion, amortization and Accretion figures are based on 2024 income statement while Lease Interest and Finance Cost are based on the aggregate figures of 2023 & 2024.

Conclusion

It must sicken the national stomach that after all the talk about sovereignty and risks by investors, we are seeing the companies already repatriating capital from Guyana. So, they are not only witnessing the rape of our natural resources and the hijacking of our country. They are witnessing, as Exxon’s exploration programme comes to an end, a small group of companies assuming the role of managers, earning the lion’s share of the country’s resources. We only have to bear it until 2057.

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Business Commentary Part 28: Sugar: Reality clothed in rhetoric – Part 1

Business and Economic Commentary by Christopher Ram No. 33

When criticism meets political pressure, grand schemes emerge from thin air

Introduction

Within just a few weeks, Guyana has been treated to two competing visions for GuySuCo. First, President Ali’s appointee as CEO, Paul Cheong promises salvation through drone technology and Brazilian partnerships – focused on making sugar work. Next comes President Ali’s vision of GuySuCo as a “hub of rural development” – many of them towns – extending into rice, cassava, and livestock – essentially admitting sugar alone cannot work.

The contradiction is telling. One vision assumes sugar can be saved through technology. The other requires diversification – or more accurately, diversion – into entirely different sectors. Both appeared as reactive responses to pressure rather than genuine planning. Yet they point in fundamentally different directions, revealing an administration with no coherent strategy whatsoever.

The trigger: Reactive announcements

Cheong’s technological pitch emerged directly in response to my critical analysis published in this newspaper in June. Within days of “Sugar Dreams and Capital Nightmares” appearing, Cheong felt compelled to respond with his vision of transformation.

Ali’s diversification scheme was unveiled weeks later at the Enmore Martyrs’ commemoration – a setting unsuitable for accountability for the PPP/C’s and his own administration’s failures. Faced with explaining why production has collapsed after nearly five years in office, Ali chose to pivot to fantasies about GuySuCo’s future transformation.

Neither vision emerged from planning sessions or stakeholder consultations. Both were hasty responses: Cheong defending against criticism, Ali deflecting from decades of failures.

What both visions completely lack

More telling than what these visions promise is what they lack: any known planning whatsoever. Neither has provided clear objectives, implementation timelines, cost projections, risk assessments, management structures, marketing strategies, or financial projections.

Nothing. For an administration with nearly five years to develop a coherent GuySuCo strategy, this absence of substance is breathtaking. This is governance by public pronouncements designed for all the wrong announcements and certainly not solid strategies for results.

The logical absurdity is staggering. We have wasted hundreds of billions on GuySuCo even when we had actual plans – flawed though they were. To expect better results with no plan and no execution sounds like insanity. Yet both are proposing grand visions plucked from thin air, unencumbered by planning or realistic assessment.

Cheong’s recycled technology

Cheong’s vision reads like a Silicon Valley pitch: drone technology, predictive maintenance, Brazilian partnerships, new dryers, packaging machines, and “greater mechanisation.” Yet these are hardly revolutionary concepts for GuySuCo – similar technological promises have been made repeatedly over the years, with mixed results at best.

The pattern is familiar: new management arrives promising transformation through the latest technology, whether it’s modern factory equipment, improved field techniques, or partnerships with international experts. Each time, the focus remains on capital expenditure and technological fixes rather than addressing fundamental issues of management, planning, and market viability.

Rather than acknowledging this history of failed technological promises and seeking proven leadership like former successful chairpersons Vic Oditt and Ronald Alli who understood both the industry and sound management principles, Cheong retreats to the same playbook of technological solutions that have disappointed before.

Ali’s trademark diversion

Ali’s pronouncement reveals his characteristic response to failure: pivot to even grander schemes that ignore present realities. Rather than explain why sugar production has collapsed, he declared GuySuCo should expand into rice, livestock, agro-processing, and fabrication services.

This is not a diversification strategy – it was Ali’s trademark diversion from accountability. His approach treats GuySuCo as a political instrument rather than an economic enterprise. The audacity is breathtaking. A complex organisation producing sugar at twice world market prices, struggling with basic operations, is somehow going to become competitive in multiple unrelated sectors?

The track record: Five times the opportunity

Before accepting either vision as credible, examine the track record. The PPP/C has governed for 27 of the past 32 years versus just 5 years and 3 months for APNU+AFC.

This means the PPP/C has been in charge of GuySuCo for more than five times longer than the Coalition. They have had the opportunity to implement technological solutions more than five times, pursue diversification, and achieve the very goals they now promise. The PPP/C tried technological solutions before. They attempted diversification before. They announced grand plans before. Each time: more money spent, more targets missed, more excuses offered.

Ali specifically has had nearly five years to deliver on reopening estates. The results: “catastrophic” production levels and a corporation whose “very future is under real threat.”

We have been this way before

Every element has been promised before. The 2010 Turnaround Plan promised 400,000 tonnes by 2013, mechanisation and transformation. The Skeldon Project promised technological revolution. Previous diversification attempts promised GuySuCo would become more than sugar. Each time, grand announcements without substance. Each time, the same result: failure dressed up in new rhetoric.

Conclusion

Both visions represent competing versions of the same delusion, made worse by their fundamental contradiction and complete absence of planning. When the CEO and President offer incompatible visions within weeks of each other, both triggered by external pressure, it reveals an administration that has lost control of its narrative, let alone its strategy.

Next week: Part 2 examines what this fool’s gamble has cost Guyana while public services crumble and opportunities are squandered.

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The Financial Statements of EXXON, HESS and CNOOC – a story of opacity and confusion

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 162 – 20 June 2025

Introduction

Columns 159 – 161 examined the individual income statements of each Stabroek Block contractor in detail. Today’s column shifts focus to analyse the combined results of the three entities, providing a broader perspective on the collective financial performance and strategic positioning of the consortium operating Guyana’s most significant petroleum asset.

Before doing so, however, let us have a brief look at a report in the Kaieteur News of 17th. June quoting Mr. Vickram Bharrat, Minister of Natural Resources on the state of relinquishment provisions on the Petroleum Agreement for the Kaieteur block.

The Kaieteur block agreement was signed with Exxon in April 2015 with a four-year initial exploration period that should have expired in April 2019 and two three-year renewals to 2025. At the end of the initial period (to 2019) the company should have relinquished 45%, a further 20% in 2022 and the balance in 2025, except for any area for which a production licence is issued, or any extension for cause. However, according to a statement from the company an extension was granted to February 2026 on the grounds, cited by the Minister, that the government was “compelled” by law to do so. Such a statement reveals a fundamental misunderstanding of the Production Sharing Agreement or deliberate deflection of responsibility.

That statement is false and would not be made by anyone with a passing understanding of Article 4.1(e), which states, unambiguously, that the Minister “may” extend exploration periods upon a showing of good cause – making his claim of legal compulsion demonstrably false while revealing dangerous regulatory weakness.

The danger is aggravated by the failure of the company to meet the conditions required to qualify for extensions. Despite only one sub-commercial well being drilled since 2015, no mandated relinquishments have occurred despite deadlines passing in 2017, 2019 and 2022. Notably, ExxonMobil simply walked away rather than meeting drilling commitments – failures which should disqualify from any extension eligibility under any competent contract administration.

This regulatory capture traces back to the Jagdeo Administration’s overly-generous force majeure relief for the entire 26,806 sq KM Stabroek Block following the Suriname vessel boarding incident – a vast distance from actual operations. With Jagdeo now heading petroleum policy, this permissive approach has become institutionalised, creating an environment where industry wishes consistently trumps national interest while the government rubber-stamps requests without rigorous scrutiny.

The PPP/C Administration has watered down its campaign commitment, first to renegotiate the 2016 Petroleum Agreement, then to better contract administration and reform, then to sanctity of contract and the latest, that the Minister is legally compelled to extend the duration of a petroleum agreement. To sum up. The PPP/C Administration has been unable to cross the lowest of the low bars that it has set itself.  

That the individuals responsible for the petroleum sector are so poorly informed must be a serious cause for concern. Note: This Agreement was signed days before the 2015 elections.

Now, back to those financial statements.

Challenging presentation of annual reports

Nearly eight years after the signing of the now-infamous 2016 Petroleum Agreement, it is clear that neither the foreign oil companies nor the Government of Guyana have any real interest in accountability. While the country’s leaders boast about revenue inflows, the foundational elements of transparency – consolidated project accounts, proper cost audits, and consistent financial reporting – are glaringly absent or deliberately obfuscated. The Guyanese people remain in the dark as to whether they are receiving even the bare minimum promised under the Agreement, including their so-called 50% share of profit oil.

Annex 2 of the Agreement, which sets out the companies’ reporting obligations, is weak and ineffectual. Reports are submitted solely to the Minister, with no legal requirement for publication or independent audit. There is no consolidated field-level financial statement, no disaggregated cost data, and no mechanism to ensure that the separately published financial statements with limited, inconsistent, and opaque information is accurate, reliable and timely. As a result, neither Parliament nor the public can verify whether the oil companies are overstating costs or underreporting profits. To correct this, Government should mandate publication of all Annex 2 statements, require independent project audits, and adopt the EITI standard in full.

What makes matters worse is the inconsistent, and in some cases misleading, financial disclosures by the oil companies themselves – all audited by the same firm. Only CNOOC acknowledges the joint operation classification under IFRS 11while Hess and Exxon remain silent on the nature of the arrangement. On taxation, CNOOC correctly states that the Government pays the contractor’s income taxes out of its share of profit oil. Exxon evades the issue entirely, while Hess claims to be subject to a 25% corporate income tax, even producing a tax computation – a misleading practice at best, and a dishonest one at worst.

The contents of the Income Statements are all different. Even the reporting currency lacks consistency. Hess reports in U.S. dollars, CNOOC in millions of Guyana dollars, and Exxon in Guyana dollars. Then there are differences in treatment and disclosure of items like royalties, retirement obligations and Decommissioning and Royalties. Such differences frustrate comparability, undermine audit quality, and suggest that the companies are dictating the terms of disclosure to their auditors – not the other way around.

Since the Government pays the corporate tax of all the companies from its share of profit oil, there should is no differential treatment. Yet, the effective tax rate of tax on the income earned by each of the companies differs significantly. This is not helped by three divergent disclosure notes, the reason for which is far from apparent. Even more troubling is the illusion of equity embedded in the so-called 50/50 profit-sharing arrangement. The financial statements of the oil companies show multibillion-dollar earnings while Guyana’s share remains comparatively meagre. The ratio for the year 2024 and cumulatively for the five years to December 2024 is in excess of 5:1.

Government 

But the Government too is guilty of opacity, if not deception. Public filings of the Exxon and Hess in the US suggest that the Government issues them with proper tax certificates confirming the discharge of their Guyana tax obligations. See Article 15:5 of the Agreement. Two problems: no money is paid out of Guyana’s share of profit oil and there is no oil company taxes paid into the Consolidated Fund. The rules of EITI, the principles of accounting, and transparency require full, complete and comprehensible disclosure. Whichever accounting route is followed – whether the taxes are deducted before transfer to the Natural Resource Fund, or after – the outcome is equally misleading.

Because the NRF has a significant component of intergenerational funds, the Government has an interest in window-dressing the balance – to make it seem better than it is. It is therefore comfortable manipulating the balance by not reflecting the amount of the tax required to be paid on behalf of the oil companies. The oil companies for their part, are not concerned about the small matter of accountability and transparency, or whether the Government manipulates the NFR or whether Tax Certificates are issued for money not received.

Compounding these financial distortions is the government’s ongoing failure to enforce one of the few clear powers it has under the Agreement: the relinquishment clause. Exxon and Co. was required to surrender 20% of the Stabroek Block contract area nearly a year ago. Instead, we are told the Ministry of Natural Resources is still “finalising” the areas to be given up. See also the introductory note on the Kaieteur Block for evidence of the wider incompetence and laissez faire attitude to see how our marine petroleum assets are managed.

Next week, we will close out on the financials by looking at the companies’ aggregated balance sheets and the state of the Natural Resource Fund.