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.