Author: Christopher Ram

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Jagdeo’s dangerous Chevron’s expectation

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. 

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Business Commentary Part 31: Trump’s tariff scorecard: 15% on Guyana, Trinidad and Venezuela. 10% on other CARICOM countries and Cuba

Introduction
One day before Guyana observed Emancipation Day, the mercurial universe Boss Donald Trump confirmed his April 2 Liberation Day Executive Order to unilaterally impose tariffs on every country trading with the United States of America. The US President imposed on Guyana’s products entering the United States a 15% tariff beginning next week – a blow with implications for this country’s trade policy and its economic diversification programme. If one is looking for any consolation, maybe it lies in the initial implausible reciprocal rate of 38% previously announced in April, using an amateur’s methodology based on the size of the trade deficit which that country has with the United States. Thanks Exxon!

It is no consolation however that Guyana and Trinidad and Tobago all have a higher rate than the other countries of the Region, including all the CARICOM countries, Suriname, Cuba and Haiti. This appears a cautionary word to Guyana which has been cosying up to the Americans, accepting that the lopsided 2016 Petroleum Agreement will remain unchanged up to 2057, hosting its Secretary of State at a special function and tolerating its ambassador interfering in Guyana’s domestic affairs in an election season. It will take some time to see the economic consequences of Trump’s action which even questions the well-worn cliché that America does not have permanent friends, only permanent interests.

Strategic partner?
It is not as if Guyana is of no consequence to the United States. We are not only of strategic importance, sitting at the top of South America. Nor are we of no diplomatic value – we make our voice heard at the United Nations and are not ideologically at odds with the USA. Indeed, there is a view that Guyana is a compliant and accommodating partner. On the economic front, we have no equal among CARICOM states. In another few years, Guyana will contribute significantly to the energy security of the USA with around 600,000 barrels of oil per day earned by American giants Exxon and Chevron from the Stabroek Block. Does that not count for something!

This imposition is not an oversight. We have former President Sam Hinds heading our embassy in Washington. We have a highly paid lobbyist in that country, and we have in Georgetown an ambassador with whom we are obviously in contact. They have all failed us and the question we must ask – without getting any answers – is why has Guyana been excluded from the 10% club? By what measure could we be placed below Cuba and Haiti and on the same plane as Venezuela? What message are the Americans trying to send? 

Despite the abundance of rhetoric about Guyana being “a strategic partner” or “the new frontier,” we remain little more than a resource basin, extracted by multinationals and then sidelined when broader trade benefits are being shared. This 15% tariff is not merely economic. It is a diplomatic signal that Guyana does not carry sufficient weight in U.S. trade calculations to warrant even the same treatment as Haiti or Saint Lucia. That is both alarming and deeply humiliating.

Question time
Even as we accelerate towards national elections, we expect our leaders and politicians to ask some searching questions. Did we request inclusion in the 10% group? Did we raise objections when the 15% classification was being drawn up? Were our diplomats even informed? This is no time for passivity. The 15% tariff decision is a clear sign that our foreign policy must be recalibrated. Our leaders must be willing to make meaningful, not symbolic representation.

Make no mistake: this has real economic consequences. Exporters of rice, rum, lumber, processed foods, and other non-oil products will now find their goods 15% more expensive in the U.S. market than similar products from Barbados or Jamaica. It undermines Guyana’s already fragile export base and disadvantages any attempt at economic diversification.

Even as we talk about building a manufacturing sector or value-added production, such efforts are directly harmed by this kind of tariff penalty. And since our oil exports are outside the scope of these tariffs, it is the non-oil sector – the very segment we claim to want to strengthen – that takes the hit.

Conclusion
We must now wait until the elections are over to address the issue and its consequences. Late as it is, we need to understand the rationale for the decision. There seems no reason why we do not call in Kingston for an explanation. The Ministry of Foreign Affairs must publish the timeline of its knowledge of this classification and the representations, if any, made to U.S. authorities. The Office of the President and Ministry of Finance must clarify how this tariff will impact exports and growth. And the Private Sector Commission must shake off its inertia and demand redress on behalf of the exporters it claims to represent.

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Floor-crossing is now solely a career strategy

Dear Editor,

In a remarkable irony, former APNU+AFC MP Jermaine Figueira who assaulted his then colleague Charrandass Persaud for casting the vital vote in the no-confidence motion that brought down their Administration in 2018, has now endorsed Irfaan Ali for President in 2025. Unlike so many of his former PNCR colleagues, however, Figueira has not publicly identified with the PPP/C. Perhaps he recognises the irony that his work as Chair of the Public Accounts Committee to examine the trillions in expenditure by the Ali Administration was totally frustrated by the PPP/C members. That abdication of a constitutional duty will rankle as long as Persaud’s vote, and is even more difficult to justify. 

The PPP/C might have refined the practice of crossing the floor, but like so many things, it started under Forbes Burnham in the sixties. Back in those days, crossing the floor in Guyana was a matter of profound principle. It meant wrestling with conscience, confronting ideology, and severing bonds of personal and political loyalty nurtured over years of struggle. Whether in the era of black-and-white manifestos or red-fist revolutions, the decision to walk away from one’s political home came with risk, self-reflection, and often, sacrifice. It was not about contracts or comfort – it was about conviction. Not in the sense of criminal charges but ideological beliefs.

In those earlier decades, defection meant potential exile, permanent suspicion, and often public scorn. But at least it stood for something – right or wrong, naïve or brave, it was principle-based. Today, it has become sanctimonious, transactional, even theatrical. Floor-crossing is now a career strategy wrapped in hoped-for prosecutorial immunity and a place on the party list. The new breed does not defect – they transition, armed with lawyer-crafted letters, and exit statements rehearsed for the evening news. The floor, once sacred and stormy, has become a polished conveyor belt to promotion, protection, and perks.

In the first era – the Era of Conviction – crossing the floor was relatively rare but consequential. It was not undertaken for position or privilege, but out of deep ideological rift or personal betrayal.

Take Vincent Teekah, a brilliant academic and PPP stalwart and Ranji Chandisingh, a Marxist theorist of impeccable ideological pedigree. Others in that era included Harry Lall, Lallbachan Lallbahadur, Leonard Durant and Maud Branco. Balram Singh Rai was another principled leaver who formed his own party and is paying the price to this day. Another brilliant and principled defector from the PPP was Moses Bhagwan, once the leader of the PYO when that organisation served as a rite of passage to political party pinnacle.

We are now in a different era – that of Convenience. The contrasts could not be sharper. Gone are the manifestos, the ideological rifts, and the soul-searching. In their place: legal cover, constitutional gymnastics, and an entire cottage industry built around “aligning with development goals.” But let us not move too fast.

Remember Sam Hinds who was plucked from the GUARD movement and put on a trajectory of lifelong protection and security which he still so richly enjoys? That was the end of that noble movement. Then there is Manzoor Nadir, once the articulate voice of The United Force, who brought the party and his family over to the PPP and now serenades the government benches as Speaker of the House, his ideological compass rendered inoperable. That generation also included Dr. Leslie Ramsammy, a standout critic of what he referred to as Jagan’s extreme left-wing ideology.

Asgar Ally was part of Jagan’s 1992 government who later teamed up with Nanda Gopaul but later came back to the PPP. Then there was Odinga Lumumba from the PNC and GGG who earned valuable assets as a reward, and Joe Hamilton, a high priest of the House of Israel and enforcer of Rabbi Washington, who has been a minister of the Government with his sons in full employment.

More recent crossers in what started the Era of Opportunism include Asha Kissoon, whose name will be mentioned in the same breath as Persaud, James Bond (the recruiter) and Geeta Chandan-Edmond – no longer crossers of floors but dancers of the political ballroom, changing partners mid-song, always claiming it was the music that moved them.

Political crossovers were more universal than even this piece would suggest. The very birth of the AFC was a product of this phenomenon: Sheila Holder (WPA), Khemraj Ramjattan (PPP) and Raphael Trotman (PNCR). Now Sherod Duncan, Juretha Fernandes and Rickey Ramkissoon move from the AFC to PNCR. It is musical chairs, except that this is played out not at a party but by the parties.

 As we review the past sixty years or so, we are impressed how the wheel has turned full circle with PPP being the original losers, to the current wave in which it is the architect and principal beneficiary. But for longevity and for mastery of the craft, the trophy must go to Kit Nascimento, who has moved seamlessly and smoothly as an early firebrand, with the unique distinction of a place in the Wynn-Parry Report in the 1962 disturbances targeting the Jagan administration, to current presidential buddy as a communications czar – with a straight face.

In this chapter of our country’s post-Independence history, the names Charrandass Persaud, Asha Kissoon and Kit Nascimento stand tall.

Yours faithfully,

Christopher Ram

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Business Commentary Part 30: When power imbalances undermine constitutional property rights

Business and Economic Commentary By Christopher Ram

Introduction

The recent letter to Stabroek News (SN 19th. July – Decision to have Attorney General lead the compulsory land acquisition process contradicts global best practices) raises legitimate concerns about the Attorney General leading the compulsory land acquisition process. The writer’s observations about power imbalances strike at the heart of what I have been advocating – that Guyana’s approach to compulsory land acquisition is fundamentally flawed and incompatible with constitutional principles and international best practices. I go further: the role played by the Attorney General blatantly violates the Compulsory Acquisition Act.

Let us remember that Article 142 of the Guyana Constitution guarantees “prompt payment of adequate compensation” for compulsorily acquired land. Yet the reality reveals a troubling disconnect between constitutional guarantee and the Act which dates back to 1914. The relevant provision restricts compensation to basic market value while excluding factors any reasonable person would consider relevant – including psychological trauma of forced displacement and loss of generational ties to ancestral lands. This creates what I have previously described as “a very imbalanced relationship between the Government and the citizen,” where the state wields “the coercive force of the law against the timidity of all but the well-heeled in society.”

When the Constitution promises adequacy, but the law delivers only market value minus most market factors, we have a system designed to shortchange citizens. Market value (MV) itself contradicts compulsory acquisition since MV is defined as the price agreed by a willing buyer and a willing seller. But the law is even worse. It has so many exclusions as to strip the landowner of his or her rights. In other words, not only is market value inappropriate, it is further denuded of the flawed amount offered by market value. My preference would be for a replacement value, or an expansion of section 19 to the Act which gives the Court latitude in increasing the amount of the market value. Sadly, it has not been my experience that the Government is too comfortable with this addition. 

The Attorney General’s role

The AG is, by definition, the government’s chief legal advocate. The practice in all these compulsory acquisitions is that the Chief Valuation Officer and the Attorney General play lead roles. I am not in the least bit certain that the roles they play in practice are legal, let alone proper.

The Act sets out detailed procedures that the State must follow when acquiring private property compulsorily, beginning when the Minister declares a project “public work” under section 3, authorises land examination under sections 4 and 5, and receives a survey report and plan under section 6, after which the Minister may either negotiate a purchase with the landowner or compulsorily acquire the land by making a declaration under section 6 that automatically vests the property in the State one month later subject to compensation (s.7), requiring the Minister to serve notice on the proprietor (s.8) and file certified copies in the Deeds Registry (s.9), before the Attorney General must apply to the Court under section 13 for compensation assessment, with the Court directing valuation and determination of appropriate compensation under sections 13-16. It is unclear whether these steps are followed and what non-compliance means to property owners.

Mr. Barrington, as Chief Valuation Officer, has held no statutory authority under the Act since the post-1990 period, and his valuation disclosed a single inapplicable comparator, raising serious concerns about the soundness of the evidence he would have tendered within the land acquisition process on behalf of the state.

The practice is different

The AG plays a lead role in meeting with and negotiating with landowners, ably supported by the Chief Valuation Officer who is promoted as an authority. This is not only wrong. It is unfair. Asking affected landowners to negotiate with the person whose job is to advance the government’s legal interests creates an inherent conflict that no amount of good intentions can resolve. International best practice emphasises independent facilitation precisely to avoid such conflicts. When communities feel they are negotiating with an adversary rather than participating in a fair process, the entire legitimacy of the project comes under threat.

No wonder then the several reports of property owners being presented with offers significantly below reasonable market rates, with little opportunity for meaningful appeal. The psychological pressure created by the government’s legal authority creates a system where “consultation” becomes a euphemism, at best for managed consent extraction, and at worst, being knowingly swindled by the State.

The deafening political silence

At the national, collective level, the most troubling feature is the complete absence of political discourse, let alone leadership on this issue. Despite the unprecedented spate of compulsory acquisitions that has accompanied Guyana’s oil trajectory – from gas-to-shore infrastructure to new highways and energy projects – not a single political party or prominent politician has paid meaningful attention to how citizens have been systematically cheated of their property.

The PPP government implements these unfair acquisitions. The PNC opposition remains silent about the constitutional violations. Third parties focus on trivia. The result is that ordinary Guyanese facing compulsory acquisition find themselves entirely alone, confronting the full power of the state with antiquated legal protections designed to favour colonial authorities.

The only and limited improvement to the 110 years old Act came in 1990 when then President Desmond Hoyte introduced a new version of section 19 which empowered the Courts to use its discretion to enhance the so-called “market value” to give the property owner “prompt payment of adequate compensation”.

The political dimension

And now, as we approach another election cycle, these same political parties that have ignored citizens’ property rights want our votes. They will speak eloquently about development and progress, but not about the families whose sacrifice made that development possible. Political parties that think they can systematically violate property rights and then count on electoral amnesia are making a dangerous miscalculation.

One of the tragedies of Guyana is that as voters do not react to having suffered from property under-valuations. Our voters can divorce their personal challenges from their political choices.

The way forward

Meaningful reform requires compensation that reflects the constitutional standard of adequacy, including a compulsory acquisition premium – no less than 25% above market value—to account for the forced nature of the transaction. The process must be genuinely independent, removing the Attorney General from stakeholder engagement and replacing government-dominated valuation with independent assessment panels.

The letter writer’s call for independent, participatory consultation processes reflects democratic wisdom. Our constitution promises adequate compensation for compulsory acquisition.

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A Response to ExxonMobil’s Letter: Embracing Fact-Based Engagement

Dear Editor,

Kaieteur News – Mr. John Colling’s commitment to “transparency and open, fact-based discussions” regarding ExxonMobil’s operations in Guyana is a welcome breath of fresh air. His July 2 letter provides an excellent opportunity to address fundamental questions about the 2024 financial statements of the Stabroek Block partners and several unresolved historical issues. He boldly asserts that ExxonMobil’s financial statements comply with International Financial Reporting Standards (IFRS), which unlike US GAAP, is based on the substance over form principle.

Guyana tourism package

IFRS 15 requires disaggregation of revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Why is there no breakdown showing what portion of reported revenue represents taxes paid by the Government, sales from 2024 Profit Oil, and prior year cost recovery? How can stakeholders assess true operational performance when the composition of revenue is deliberately obfuscated?

Even if cost oil was sold to customers, the proceeds represent recovery of past investments, not compensation for current-year services. The economic substance is reimbursement, not revenue generation. When 65% of reported “revenue” is actually cost recovery from prior years, this fundamentally misleads users about operational performance.

Basic accounting principles require expenditures with future economic benefits to be recognised as assets. The Petroleum Agreement creates contractual rights to cost recovery – guaranteed rights backed by legal force. Why do the 2024 financial statements fail to recognise these guaranteed recoverable costs as assets? This selective application – treating guaranteed recoveries as uncertain while booking deferred tax liabilities that Guyana pays – violates basic IFRS principles and accounting integrity.

Guyana tourism package

The 2024 statements show significant deferred tax liabilities that will never be paid since Guyana covers these through cost recovery mechanisms. Would Mr. Colling disclose to Guyanese which government agency issued the tax certificates under Article 15.4 of the 2016 Agreement and the total value of those certificates in 2024? The failure to explain that Guyana effectively subsidizes the companies’ tax burden while they book these as concrete liabilities represents a fundamental failure of disclosure.

What is the exact value of unrecovered costs carried forward as of December 31, 2024? As the operator, how soon does ExxonMobil expect to reach full cost recovery? These are material facts that stakeholders need to assess the duration and scale of cost recovery impacts on Guyana’s revenues.

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CNOOC’s 2024 financial statements reveal its involvement in the Gas-to-Energy project. Would Mr. Colling disclose the total expenditure of all Stabroek Block partners – ExxonMobil, Hess, and CNOOC – on this project claimed as recoverable cost in 2024, the amount carried forward to 2025, and the total amount of expenditure on this project to which they are committed?

When reported profits bear no relationship to the actual profit oil received ($10.4 billion reported vs. $1.9 billion actual entitlement), how do these statements meet IFRS’s overriding requirement for true and fair presentation? The statements create more confusion than clarity about the companies’ actual financial relationship with Guyana.

Guyana tourism package

IAS 24 contains extensive requirements of disclosures concerning Related Parties. Does Mr. Colling honestly believe that the few lines in Note 14 to Exxon’s financial statements meet these requirements?

Mr. Colling’s commitment to fact-based engagement also provides an opportunity to address several historical irregularities that have gone unaddressed for years.

  1. In 2018, I analysed the audited financial statements of all three companies and found their claimed US$460 million in pre-contract costs at year end 2015 exceeded by at least US$92 million the total investment shown in their own financial statements? Almost a decade later, this discrepancy remains unexplained.
  2. Esso was the sole contractor under the 1999 Stabroek Agreement. Shell bought in and later exited before discovery. Can Mr. Colling explain whether the proceeds from that transaction and subsequent sales to Hess and CNOOC were brought into the books of the local branch or were paid offshore? If the latter, that would not only violate the 2016 Agreement but raise serious integrity issues.
  3. Can Mr. Colling tell us whether as an external company, Exxon was granted a licence for the land on which its Head Office is being constructed and whether the company will recover those costs under the Agreement?

The similarities between Mr. Colling’s letter and the Ministry of Natural Resources’ statement a few days earlier is cause for suspicion. While using identical talking points, they studiously avoid the actual compliance violations repeatedly raised. Mr. Colling now has a further opportunity to demonstrate his stated commitment to transparency. If ExxonMobil’s financial reporting truly provides the “consistency and transparency” claimed, addressing these questions should be straightforward.

While I sincerely wish to take Mr. Colling at his word, having considered his responses and for the reasons set out, I still hold that Exxon’s accounting is indefensibly lacking.  As a public interest company, Exxon shows no respect for the people of Guyana, weaponising accounting complexity to avoid informed public scrutiny. Just like the Government does.

Guyana tourism package

By 2057, when these companies depart with their profits, our children will inherit the bitter legacy of resource wealth managed through financial statements designed to confuse rather than illuminate.

Respectfully,

 Christopher Ram