Category: The Road to First Oil

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.

Every Man, Woman and Child in Guyana must become oil-minded – Column 166

Today’s column compares the role of oil and the 2016 Petroleum Agreement in the 2025 election campaign and in 2020, the first year of oil production. Then Bharrat Jagdeo and Irfaan Ali were seeking to unseat the APNU + AFC Coalition. The Agreement was released to the public on 28 December 2017, but its terms were hotly debated and Jagdeo was violently opposed to every aspect about the contract.

Critics could hammer its poor terms and secrecy, link it to Raphael Trotman’s signature, and fold it into a wider indictment: APNU+AFC had lost a no-confidence motion in December 2018, refused to call elections on time, and then – when elections were finally held – spent five months trying to rig the results. With its 2% royalty, sweeping tax exemptions, lack of ring-fencing, and a year of secrecy before disclosure, it was the PPP/C’s sharpest weapon against the APNU+AFC coalition.

In that climate, the oil contract symbolised incompetence, impunity, and contempt for the rule of law. It was political dynamite.

Today, the deal is intact, citizens’ worst fears about the lopsided nature of the Agreement have been proved right. Yet, the political fire is gone – not because the problems have been resolved, but because the ground shifted.

A changed landscape in 2025

Production has more than quadrupled. Prices have stayed steady, revenues have kept flowing, and the budget is now about four times 2020’s size. The PPP/C has used this wealth not to fix the deal, but to bury it under high-visibility spending, ribbon-cuttings, and cash grants with more to come. For many households, a grant feels more important than a royalty clause. Attention has shifted from how the deal was made to how the windfall is distributed.

The opposition is weakened. APNU+AFC cannot credibly attack its own agreement. The scars of the no-confidence saga and the 2020 electoral impasse remain, and leadership changes have not restored trust.

More significantly and inexplicably, the PPP/C changed its tune. In opposition it promised “review and renegotiate.” In government it has refused to release the report on how the deal was signed, avoided investigating Trotman, kept secret the financing of billions in tax concessions, completed no audits of cost claims, stalled on renegotiation, and quietly channeled oil revenues into the much-delayed, over-budget gas-to-energy project. Its language now matches APNU+AFC’s old line: “sanctity of contract” and the Venezuela bogey.  Then of course, the Vice President is the Petroleum Commission.

Several forces have removed the oil contract from Guyana’s political agenda. Direct cash handouts have proven more politically effective than contract debates. When voters receive immediate benefits, arguments about royalty rates lose both urgency and meaning. For many, the fear of antagonising Exxon – and by extension, the Trump administration – has become a new political reality. With Trump’s return to power and his pro-business stance, challenging American oil interests may seem  riskier than defending sovereignty.

The National Assembly has avoided discussion of the petroleum agreement. Neither party shows willingness to reopen the contract, quarantining the issue from debate. Government influence over media has shifted coverage toward positive messaging while marginalizing critics. The transformation has been so complete that even Kaieteur News, once the loudest critic, lost a leading anti-contract journalist to the camp of its defenders.

Years of technical arguments with little change have exhausted commentators and the public. The complexity of petroleum economics has proven difficult to sustain politically. The absence of disasters has weakened reform arguments. Without oil spills, critics’ warnings remain theoretical, removing catalysts for concern.

Broader democratic concerns have overshadowed contract issues. Questions about governance have drawn energy away from petroleum debates toward institutional health. Venezuela’s territorial claims have made ExxonMobil’s presence geopolitically valuable. Challenging the company is seen as undermining security, increasing threats to our territoriality.

With this retreat, Exxon may feel that it has taken ownership of Guyana. 

The consequences of silence

But the PPP/C is as much an asset to and a friend of Exxon as the APNU +AFC has been. Its record on oil governance is no better than APNU+AFC’s: no reform of a widely criticised contract, no completed audits, no accountability for its signing, no delivery of an independent petroleum commission; secrecy over vast tax credits that would wipe out the Natural Resource Fund if properly accounted for. And the control of every aspect of the largest sector of the economy in the grip of one man, in a mutual pact with Exxon.

Each passing year reinforces the belief that nothing can and will be changed. An agreement condemned in 2020 that remains unchanged in 2025 becomes more entrenched with each passing year. And that does not escape the wily eyes of Exxon.

Yet, the fundamental issues remain as they were in 2020. Oil belongs to the people; so do the revenues. Being “oil-minded” does not mean memorising production data – it means looking beyond today’s grants to securing Guyana’s sovereignty and tomorrow’s sustainability. It means insisting on transparency, audits, and investments that outlast the oil era: education, health, infrastructure, and diversification.

Conclusion

The 2016 Petroleum Agreement has not faded because it is no longer an issue. It has lost its sharpness because of the duplicity and the about face of the PPP/C. It has been buried by money, messaging, a weakened opposition, parliamentary silence, media influence, fatigue, democratic erosion, geopolitics, growing evidence of pervasive corruption, and the threats to our democracy.

In 2020, it was a sword. In 2025, neither main party wants to touch it. That is exactly why the people must. Every year of silence makes Exxon’s position more unshakeable and Guyana’s leverage weaker. The window for fair terms is closing with each passing barrel. We must remain oil minded.

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 165

Introduction

Chevron has won the right to acquire Hess’s 30% share in the Stabroek Block. This is not a direct acquisition but one made at the shareholders level where Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. Exxon had challenged the transaction claiming that it had the right of first refusal but the International Chamber of Commerce in Paris ruled otherwise. Exxon’s challenge stemmed from its interpretation of a joint operating agreement (JOA) that governs the Stabroek Block. The agreement included a “right of first refusal” clause, which Exxon argued gave it the right to buy Hess’s stake before it could be sold to a third party. The flaw in Exxon’s thinking is that this was not a Guyana/Stabroek Block transaction.

These columns had argued that Guyana ought to have stepped in and bought the share, paying out of future profits. Clearly, this Government has no appetite to challenge anything the Stabroek Block partners do. But it is more than that. Vice President Jagdeo, in an apparent endorsement of Chevron’s success expressed confidence that Chevron will serve as Guyana’s guardian angel. Such an opinion reflects a fundamental misunderstanding of how multinational oil companies operate and what the recent arbitration victory actually reveals about corporate priorities.

Jagdeo’s misguided logic

Let us try to understand Jagdeo’s convoluted idea. He argues that “having another US major that had a kind of well, tense relationship with Exxon… that tension between the two could serve our country better” because Chevron will be “making sure that those costs are minimised”, thus increasing Guyana’s take which currently stands at about 14%. Those sentiments reveal dangerous naiveté about corporate motivations. Jagdeo believes Chevron will somehow prioritise Guyana’s interests over profit maximisation – a fundamentally flawed assumption. All he had to do was read the statements coming out of Chevron, or read the Joint Operating Agreement signed by Exxon, Hess and CNOOC.

In fact, central to their case before the Arbitration Panel, was the interest and their duty to their shareholders. ExxonMobil CEO Darren Woods stated the company had “a clear duty to our investors to consider our preemption rights to protect the value we created through our innovation and hard work.”

And following the approval of the deal, Chevron’s CFO Eimear Bonner emphasised that the deal would “drive significant free cash flow and production growth into the 2030s” and achieve “$1 billion in annual run-rate cost synergies.” And CEO Mike Wirth stated it would “drive greater long-term value to shareholders.”

Guyana not in oil companies’ equation

When asked about operational changes, Wirth told American television that his company anticipates headcount reductions due to “overlaps.” Notably absent from any of these shareholder communications was any mention of looking out for Guyana’s interests or serving as a watchdog over ExxonMobil’s costs. Jagdeo, the policy wonk, should know better. The 2016 Petroleum Agreement explicitly designates ExxonMobil as the operator with comprehensive authority over day-to-day operations. This operational control provides ExxonMobil with several crucial advantages that limit Chevron’s ability to effectively police costs. Chevron, as a non-operating partner, will have limited ability to challenge these decisions effectively, particularly given that ExxonMobil can leverage its technical expertise and its 26 years in the Block, to defend expenditure decisions.

As an economist, Jagdeo understands that when costs are largely recoverable and profits shared proportionally, there is extremely limited incentive for cost reduction, let alone cost policing. (They get back 100% of cost but only 50% share of profit). Nor does he seem to understand boardroom dynamics. Even after the bitter arbitration dispute, ExxonMobil immediately welcomed Chevron as a partner, stating: “We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved.” Indeed, there is no evidence internationally that show joint venture partners in oil or other resource projects acting as effective watchdogs for host governments. Their primary obligation is to their shareholders, not to the host country.

The Audit Reality Check

If Jagdeo believes that Exxon and CNOOC are inflating costs, then he is admitting that the three annual audits of the oil companies’ books allowed by the Agreement are ineffective, a waste of time and money. It is disturbing even to contemplate that the government expects Chevron, the new kid on the block, will spend time seeking to solve Guyana’s audit problem. The issue is ineffective contract administration and weak government oversight which Jagdeo’s approach is seeking to outsource to Chevron! Instead of protecting the country’s interests through robust regulatory mechanisms, Jagdeo seeks to abdicate its duty.

Conclusion

VP Jagdeo’s faith that Chevron will look out for Guyana’s interests represents dangerous naiveté about corporate motivations. The recent arbitration battle demonstrated that both ExxonMobil and Chevron are primarily concerned with maximising returns to their shareholders, not protecting Guyana’s fiscal interests. In fact, if they were that interested in Guyana’s interest, they would proactively agree to renegotiating the 2016 Agreement. But Jagdeo does not want to hear that. The Joint Operating Agreement dynamics, combined with cost recovery mechanisms in the 2016 Petroleum Agreement, actually align the interests of all foreign partners against those of the host government.

Guyana’s interests will be protected only through robust government oversight, technical expertise, and strong contractual frameworks – not through hoping that one Stabroek Block contractor will police another. We should not contemplate, let alone afford to outsource our country’s oversight responsibilities to foreign oil companies whose primary allegiance lies elsewhere. Jagdeo’s statement does not inspire confidence. 

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 164

“State capture is understood as efforts by private actors and public actors with private interests to redirect public policy decisions away from the public interest, using corrupt means and clustering around certain state organs and functions.”: Transparency International, Examining State Capture (2020), p. 8

Introduction

Exxon last week, through John Colling, its local Chief of Finance, reacted sharply to an article appearing in the Kaieteur News based on last week’s column For the Good Times which cast doubts on the company’s 2024 financial statements. It was the first such letter and one wonders whether the outrage was caused by the letter itself or the references to Yahoo Finance and Bloomberg, two prominent members of the financial press. I subsequently sought to engage Mr. Colling and started a conversation with him by asking several questions. There is one further question I have for him: tell me John, do all of these billions in sales have no cost?  

Let’s get to today’s column for which the quotation above seems dangerously relevant – the capture of the state by the oil companies, in collusion with or independent of state actors. Transparency International reminds us that state capture is no relic of corrupt old regimes – it is alive and well wherever powerful private interests find weak institutions and politicians to bend to their will. We missed the signs from 2016 when Exxon “roughed up” GGMC’s top managers and when David Granger made Raphael Trotman sign one of the worst petroleum contracts for the past fifty years. Signs that were reinforced from the time the PPP/C came to power in 2020 and reneged on every commitment to robustly challenge the company and the contract.

The Minister was serious

The pattern continues with more brazenness and absurdity when the minister responsible for the sector can justify the breach of promise about an independent Petroleum Commission by saying that this will lead to delays. Yes, he was serious! It is that mindset that shapes us into a textbook example of how the seeds of the resource curse are planted, nurtured and promoted – not by accident, but by design. Not by divine forces but by Irfaan Ali and Bharrat Jagdeo.

It started with concealment of the 2016 Agreement and the so-called signing bonus. More recently we have seen the Government batting for indefensible accounting, concealment of information, secret deals on sports, the gas to energy project, the company’s head office building and manipulation of the Agreement itself. The government – the supposed guardian of the public interest – has become the junior partner in its own capture.

Unreadable books

By any standard and despite its protestations, Exxon’s financial reporting in Guyana is incomplete, opaque, and at times downright misleading. It is like accounting for dummies, which I covered in last week’s column and a letter in yesterday’s SN. I do not think for one minute that these are cases of innocent oversight. ExxonMobil is not a naïve operator; it employs some of the world’s most sophisticated accountants, lawyers, and lobbyists. It knows exactly how to bury costs to inflate profits, confident that “the formula” explains everything, and that it can get away with ii.

PPP: From Gatekeeper to Junior Partner and cheerleader

Sadly, this is not a failure of corporate responsibility, but of governance. When Transparency International defines state capture, it does not single out only the private actors. It warns that public actors – the very government ministries and officials entrusted to protect the national interest — become co-opted too. The party that once promised to revisit the abominable contract now hides behind excuses and empty talk of ‘stability.’ It tells the people it cannot push Exxon too hard — we might scare away investment or worse, and weaken our security position against Venezuela’s claim. The same kind of thinking that brought Jim Jones – and shame – to Guyana.

The PPP government has made itself a willing accomplice to Exxon’s entrenchment. It refuses to renegotiate the 2016 agreement even though the text permits it. It stalls the creation of an independent Petroleum Commission, knowing full well that genuine independence would mean rigorous audits, clear accounts and proper cost verification.

When a government that should defend the people’s patrimony instead defends the company’s privilege, that is state capture in its purest form.

Cricket lovely cricket

Exxon has so convincingly turned accounting into the magician’s trick, they needed a popular national distraction. President Ali calls on “Alistair” to meet Guyana’s franchise cricket team, reminiscent of the Saudis and the Qataris in the new trend of sportswashing.  Exxon knows that cricket is no ordinary sport in Guyana and spends freely to wrap its name around our players, our national stadium and placing the national flag in the hands of spectators. In the spirit of panem et circenses, (bread and circus), it has achieved a public relations coup, bought cheaply with sponsorships while we strain to pay their taxes from funds otherwise available to build roads, schools and hospitals.

The President plays his part, granting unlawful tax concessions to Exxon and those more directly involved, helping to boost the Exxon’s image and distracting from the exploitation of the country – further evidence of state capture. It does not end there. Government has pulled the oil companies into the gas to energy project, with the trademark no disclosure, no accounting and no reporting. The billions in 2024 cost oil no doubt hide huge sums attributable to the project. Exxon bankrolls it — but on what terms? Who verifies the billions that will be claimed as cost oil before Guyana gets its share? With no independent Petroleum Commission in place, we are left to trust that the same players who are not forthcoming about costs on the Stabroek Block will suddenly discover the virtue of full disclosure.

Conclusion

This entire charade is crowned by fear. The fear that if we push Exxon too hard, it will pack up, and take America’s security shield with it — leaving us exposed to Venezuela’s aggression over the Essequibo. That threat is real. But using it to excuse gross imbalance is the final stroke of capture. When a government is so compromised that it cannot even use the renegotiation clause for fear of angering its corporate patron, it loses the moral and practical authority to govern in the people’s interest.

Jagan, Damon, Cuffy, Rodney and the Enmore Martyrs fought for our freedom, our sovereignty and our country. Sadly, Granger, Trotman Jagdeo and Ali seem bent on reversing those heroic contributions. Transparency International’s warning should be pinned to every office wall from Main Street to the Ministry of Natural Resources: state capture is not just corruption — it is the gateway to turning oil wealth into oil dependence, oil anger, oil poverty and ultimately the oil curse. 

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.