Category: The Road to First Oil

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.

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.

Every man, woman and child must become oil minded (Part 170)

Introduction

This column takes up from last week’s discussion on the September 23 letter from US Senators Whitehouse, Van Hollen and Merkley to Exxon’s Chairman, Darren Woods on tax credits claimed in his company’s tax returns in the USA. As a reminder, that letter arose out of some sterling efforts and representation by OGGN, a US NGO formed to promote a better deal for Guyana from the Stabroek Block. In their letter, the senators requested that Woods, by October 23, show whether Exxon has in fact paid income taxes in Guyana under the 2016 Agreement.

I have since reviewed Hess’ Standard Disclosure 4 filed in the USA. In it, Hess states:

“A portion of gross production from the Stabroek Block, separate from the joint venture partners’ cost recovery and profit share entitlement, is used to satisfy the joint venture partners’ income tax liability. Delivery of this production to the government in satisfaction of the joint venture partners’ income tax liability is administered by ExxonMobil Guyana Ltd. as the operator and therefore is not included in this report as a payment.”

That is not only gibberish. It is false and deliberately so. Hess and its accountants know how article 15.4 and 15.5 of the 2016 Petroleum Agreement are worded. Column 169 set out the process in a narrative chart. 

But now comes Exxon itself. On September 26 Exxon filed its own Form SD with the United States Securities and Exchange Commission. And there, in black and white, Exxon reports for Guyana in 2024 under a column Taxes US1,236.2 Mn.  Beneath the table appears Exxon’s explanatory note:

“Production entitlement of 28,073,185 BBLs is valued at the realization price issued in the press by the Ministry of Natural Resources offset by EMNI Taxes.”

The message which Exxon sought to convey is that it paid US$1,236 Mn in taxes to the Guyana Revenue Authority in 2024. It is public knowledge that no such money was taken out from the NRF and that there is no payment of that amount into the GRA/Consolidated Fund. This shifts the onus to the GRA and the Minister of Natural Resources who is required by the Agreement to pay the money to the GRA on behalf of the Exxon. Neither the Government, the Minister of Natural Resources nor government appointee Charles Ramson Snr., Commissioner of Information, has provided any information that could settle this issue.

Provide the proof

If the money was actually paid, Guyana should be able to produce proof instantly. But if not, there seems to be a grand conspiracy in which Exxon has made a misleading, or false statement in a statutory SEC filing. Maybe OGGN should take this matter one step further: Make a complaint to the SEC for false or misleading information. 

To sum up then, there is not one but three alternative facts, a feat which not even Kellyanne Conway could achieve. Here they are:

Hess, with its incoherent, mythical talk of gross production and operator administration.

Exxon, with its “Taxes” column showing US$1,236 Mn.

The Government of Guyana, with its silence over certificates issued in its name for money never received.

Gibberish at Hess’ level in a public document signed by an official cannot be dismissed as ignorance. It is distortion. A billion-dollar column presented to the SEC by Exxon cannot be brushed aside. The non-description other than “Taxes” is no oversight. It is deliberate ambiguity designed to mislead.

Silence is not an option for Guyana when there is a formal request under the Access to Information Act.  It constitutes concealment, evasion in public office and a breach of a statutory duty.

Don’t cry for Exxon

The senators have given Exxon one month to provide the information. They also showed both prescience and frankness in their letter to Darren Woods. We should, however, manage our expectations. Three senators writing on their own, however senior, do not possess the authority of a Senate committee. Their letter to Darren Woods is not a subpoena. Exxon is therefore not legally compelled to respond in the way it would be to a congressional committee. But that does not mean the letter is without weight. Failure by Exxon to respond would entitle the senators to draw their own conclusions – and to say publicly that the company cannot produce proof of payments.

Hope for Guyana

Civil society in Guyana needs to take the lead from OGGN. Its members have no real skin in the game. We have seen in President Ali’s statement on the troubling foreign exchange situation in Guyana. If he reflects for one minute only, he will realise that his failure to “review and renegotiate” is a major cause of that situation.

 We Invest in Nationhood (WIN) and its leader Azruddin Mohamed can take the example of the three senators. They can play a leading role and earn further success in addressing what is the most significant economic issue facing Guyana. This is not a cause from which patriotic Guyanese should shirk.

Conclusion

The Senators have asked for proof. Hess has provided gibberish. Exxon has provided a column.  Guyana has provided silence. On October 23, Darren Woods must answer. And when he does, there will be two simple questions for Guyana: Were receipts issued by the GRA? And who issued the certificates to Exxon and Hess?

Every Man, Woman and Child must become oil minded – Column 168

Introduction

Petroleum and gas and supporting services make up 94% of the Mining and Quarrying sector which in turn makes up 70% of Guyana’s economy. Since 2021, it has been primarily responsible for the spectacular growth that has earned Guyana the distinction of fastest growing economy in the world. Money from the oil fund (NRF) makes up exactly 50% of current revenues in 2025. It is acknowledged as the product of the most lopsided oil contract for the past several decades, measured by what the Government gets out of the sector compared with the blessings to the oil companies. All this while the private sector has a minimum wage of $60,000 per month, businesses complain about workers and foreign exchange and the poor complain about the cost of living.  

Naturally, the Government wants to divert attention from its management of the sector and has pushed the opposition into arguing how the miniature cake is to be shared rather than how to fight for a bigger cake. It is an area on which the ruling party ought to be most vulnerable although some might argue that corruption is mightily serious.

Come Monday September 1, as voters go to the polls, they may not be aware that the sector offers the greatest opportunity to truly transform Guyana. This is perhaps the last best chance to have some say on whether Guyana should re-assert its sovereignty rights and power to exercise control over our vast petroleum resources. That choice is not limited to oil but to the direction of the nation. If left unchallenged, the PPP’s model of petroleum sector administration will be no better than its administration of GuySuCo. Undisturbed, this model will define the country’s future for decades. And that is why the coming elections matter so deeply.

Trusting Ali and Jagdeo

We all recall how much we trusted Irfaan Ali and Bharrat Jagdeo when they told us five years ago that they would review and renegotiate the 2016 Agreement as soon as they got back into power. The echo of their sounds had hardly receded before being replaced by the mantra “sanctity of contract”, national interest replaced by Exxon’s interest. 

The response to every criticism, suggestion or recommendation is met with the same response, as though repetition could transform political deception into some constitutional principle. The PPP try to sell its 2021 Petroleum Activities Act as an antidote, without ever mentioning that the 2021 Act does not apply to the 2016 Agreement.

Therefore, the iniquities remain, even if the electorate is led to believe the problem has been solved. With every passing day, every election cycle, every success at the polls or in the courts, the chance of change becomes less. Every act of theirs, and of the Ministry of Natural Resources, is designed to favour Exxon and its partners while the people go after the crumbs. 

The cost of the about turn

It is easier to see investments in roads, bridges, schools and physical, visible infrastructure than it is to see poverty and hardships. Only those who feel it know it. We need to do so much more than have large swathes of our population lament their state of poverty. A working-class government that truly cares would see it as a primary duty to say that we will not accept 14% for our depletable resources. It is the moral equivalent of the theft of our sovereignty. And the PPP/C is a willing accomplice. 

Its capitulation to Exxon manifests in concrete actions that undermine Guyana’s sovereignty: allowing Exxon to build its Ogle headquarters without the required Presidential license for foreign land acquisition, issuing production licenses without any conditions, and defending an overly broad stability clause that freezes Guyana’s laws until 2056 rather than utilising the agreement’s own renegotiation provisions, as the previous Coalition government successfully did with royalty rates. Most troubling is the government’s refusal to establish an independent Petroleum Commission, leaving critical oversight in the hands of the same politicians who have betrayed our trust.  

The last, best chance

The truth is simple: once these elections are done, the prospects for revisiting the 2016 Agreement will vanish. With each year, the unfairness will harden, and the legal and financial entanglements will grow more difficult to unwind.

That is why these elections must be understood as the last, best chance for Guyanese to demand action. A new mandate is the only leverage strong enough to force a government to put sovereignty above sanctity – and to borrow from Sir Jock Campbell- the people before Exxon’s profits.

Conclusion

This election is not an ordinary contest of parties and personalities. It is a referendum on the PPP’s management of the sector. This column argues that more than even oil, but because of it, sovereignty itself is on the ballot.

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 167

Introduction

The electorate in 2020 punished APNU+AFC for the lopsided 2016 Petroleum Agreement, revealed to the public only long after it had been signed in June 2016. Civil society was relentless, and the Ali–Jagdeo ticket was brutal and emphatic. They pledged to review and renegotiate the Agreement. They would establish an independent Petroleum Commission. They promised better contract administration.

Five years later, the debate has come full circle. This column looks specifically at the oil and gas sections of the manifestos of the PPP/C, APNU, AFC, WIN, and the Forward Guyana Movement, now offered up to the public. The focus is on what each party promises, what has been delivered, and which proposals stand up to scrutiny.

PPP/C: Spin Versus Reality

The PPP/C takes a dual approach. A review, nay boast of its achievements and a promise of what is yet to come. So, it highlights its legislative action: a new 2021 Natural Resource Fund Act, the 2023 Petroleum Activities Act to replace the age-old Petroleum Exploration and Production Act, and a new model Production Sharing Agreement with less outrageous fiscal terms for future blocks. It boasts about US$3.1 billion in the NRF which is in fact overstated by the amount of taxes it has paid on behalf of the oil companies but which it refuses to disclose. Boasts about 1,000 local firms registered under the Local Content Act which it promised to revise since 2023 but did not. Then it conflates these with stalled progress on the Wales Gas-to-Energy project which is being done without a feasibility study or a disclosed cost.

Nowhere does the manifesto admit that none of these touch the 2016 deal that lies at the heart of the controversy. The government promised renegotiation in 2020 but never tried. Contract administration has been poor: no audit completed on time, the first audit mishandled, and relinquishment deadlines allowed to drift. The Petroleum Commission, once sold as a centrepiece of independent oversight, has been quietly abandoned.

Even the NRF reform was shallow. Transfers are set by a simplistic formula based on percentages of the fund’s balance, ensuring political control rather than professional management. What the PPP/C calls reform is, in truth, centralisation of power in the hands of politicians.

It faces a huge trust deficit to explain the reality that its government campaigned as a reformer but governed as a dormouse and apologist.

APNU: Renegotiation and Fiscal Rules

APNU overlooks its primary role in the 2016 Agreement and has been annoyingly ambivalent about the Agreement and the PPP/C’s management of the oil sector for five years.

If we can take it at its word, it will “get a better deal within two years.” It proposes an autonomous Petroleum Commission, professional advisory teams, fiscal rules to discipline savings and spending, and publication of all contracts.

This is right in principle. Guyana cannot rely on future agreements alone while the Stabroek PSA drains the treasury. Codified fiscal rules would add stability and protect future generations. The challenge, however, is feasibility. Exxon is unlikely to accept changes easily, and legal routes are narrow. APNU may risk overpromising, but it at least faces the reality of the 2016 deal and couples renegotiation with stronger institutions.

AFC: Oversight and Environment First

Ironically, the AFC, whose top leader Raphael Trotman signed the 2016 Agreement and whose current leader and presidential candidate is a key professional service provider to the oil companies, offers the most detailed timetable. Within 30 days it would initiate renegotiation; within 60 days establish a Petroleum Commission. It pledges to enforce ring-fencing, ban routine flaring and produced-water dumping, and require full liability insurance for spills. It also promises quarterly NRF reporting with civil society oversight.

The manifesto’s strength is its seriousness about oversight and environment. By focusing on insurance and liability, it addresses the gravest risk – that a spill could cripple the country. Its emphasis on transparency and civil society participation aligns with international best practice.

The weakness is ambition. Attempting renegotiation, regulatory reform, and NRF overhaul simultaneously may overwhelm capacity. Yet of all the manifestos, the AFC’s is the most technically robust and grounded in the mechanics of sound petroleum management.

These provisions bear the unmistakable hand of Dr. Vince Adams, arguably the most accomplished Guyanese petroleum environment specialist.  

WIN: Transparency and Renewables

While not the most technically sound or complete set of policy proposals, WIN relies on its appeal and offers a people-centred focus. It promises full publication of all extractive contracts, strict ring-fencing, and transparent monitoring of oil revenues. More strikingly, it proposes a bold national wind and solar programme to complement gas-to-shore, reduce tariffs by up to 70%, and end chronic blackouts.

WIN’s vision and its perceived authenticity seem to resonate with the ordinary voters. Households care as much about electricity bills and reliability as they do about royalty rates. Tying petroleum wealth to cheaper, cleaner power connects oil policy directly to daily life. The weakness is feasibility — financing and executing such an ambitious renewable rollout will be difficult. Still, WIN adds a valuable emphasis on sustainability and transparency.

Forward Guyana Movement: Linking Oil to Governance

The Forward Guyana Movement situates oil inside a broader governance reset: shared power, zero tolerance for corruption, audited NRF accounts, and movement toward a National Oil Company. It emphasises that without tackling corruption and exclusion, no resource management system will succeed.

This perspective is valid. Oil cannot be insulated from Guyana’s wider governance challenges. The weakness is that the manifesto offers fewer technical details compared with the AFC or WIN. But its central message – that petroleum governance is an offshoot of political governance – is important.

Conclusion: Rating the Promises

My assessment is that the AFC’s proposals come out tops, followed by the APNU, WIN and FGM with the PPP/C’s suffering from a betrayal of trust and a promise of more of the same.

 The electorate’s decision will determine whether Guyana continues with political control dressed up as reform, or whether it begins the hard work of building professional institutions and securing a fairer share of its oil wealth.