CNOOC Joins the Trillion Dollar Club

Part 2: Hess in context — and CNOOC joins the party

Introduction

Last week’s column closed on a single fact: Hess Guyana’s accumulated surplus at 31 December 2025 of GY$1.741 trillion was almost equal to all NRF deposits since first oil and larger than Guyana’s 2026 National Budget. Today’s column completes the Hess review and introduces CNOOC Petroleum Guyana Limited (CNOOC) which filed its 2025 audited statements at the Commercial Registry earlier this week. Exxon, the ultimate game player, will continue to be the last of the three Stabroek Block concession holders to release its financial statements.

Completing the Hess Picture

Three further features of the 2025 Hess accounts deserve attention:

• Hess shows revenue of GY$1,098.9 Bn. That figure must — under the 2016 Agreement and IFRS — include the income tax paid on Hess’s behalf by the Government. If it does not, the audited statements are wrong. If it does, true cash revenue is approximately GY$897 Bn, against profit after tax of GY$605 Bn — a 67 percent net margin.
• Depreciation, depletion and amortisation (DDA) of GY$183.1 billion in 2025. DD&A is a non-cash charge representing capital already recovered from cost oil — a closed loop in which the only outflow is to shareholders abroad. Worse, because DD&A is itself a recoverable cost under the Agreement, Guyana bears half of it through foregone profit oil, while the contractor treats it as a source to fund its investment.    
• Payments to the mystical “head office” of GY$408.3 billion. $126.3 Bn to pay off what was left of the advances from “head office”, and $282.0 Bn in distribution from surplus. Since all such payments are exempt from the 20% withholding tax, they are just lumped together. A manifestation of a government which favours borrowings to be repaid by taxpayers over taxing the foreign oil companies.  

CNOOC 2025 — Quietly Spectacular

CNOOC is the local branch of a British Virgin Islands intermediate of the China National Offshore Oil Corporation, ultimately owned by the State Council of the People’s Republic of China. As Oil and Gas Column 132 (June 8, 2024) noted, the intermediate parent of the Guyana Branch has a permanent capital of US$200,000. From that base, the 25 percent stakeholder reported for 2025:

• Net Sales of GY$778.4 billion, down 5 percent from 2024 — the first revenue decline of the production era. Under the 2016 Agreement and IFRS, that figure must include the income tax payable by Government on CNOOC’s behalf. If it does not, the audited statements are wrong. If it does, true cash revenue is GY$738.1 billion, profit after tax GY$463.1 billion – a 63 percent net margin. Hess on the same basis: 67 percent. The Agreement, not management, generates the number. 
• Net income before tax of GY$503.4 billion (2024: GY$553.7 billion), reduced by a deferred income tax expense of GY$40.3 billion – a non-cash charge representing future tax which under the 2016 Agreement, it will never pay.  
• Dividend to head office of GY$104.25 billion – identical to 2024, suggesting an internal distribution policy rather than a response to results.
• Retained earnings at 31 December 2025 of GY$1.434 trillion – up from GY$1.075 trillion at end-2024 and GY$648 billion at end-2023.
• Repayment of US$886 million on the parent’s US$3.5 billion credit facility, reducing the drawn balance from US$1,129 million at end-2024 to US$243 million at end-2025.

CNOOC, holder of the smallest interest in the Block – 25% – is practically debt-free. It discloses total assets of GY$1.88 trillion, while its only conventional liability is GY$72.8 Bn of trade payables. A “deferred income tax liability” of GY$174.8 Bn sits on the books, which under the 2016 Agreement it is a tax CNOOC will never pay. So too, does a decommissioning provision of GY$197.6 Bn, all of it recoverable as cost oil borne 50% by Guyana. In substance the “provision” functions as a long-dated, interest-free pool of cash that CNOOC has the use of in the meantime. The contractor has the funding mechanism; the country bears the cost.

One further comment. Hess remits its surplus principally as branch distributions; CNOOC “distributes” a fixed annual dividend and uses cash flow additionally to repay an internal parent credit facility. It does not seem to bother the Branch’s directors or auditors that Branches do not pay dividends.

Now we await the financials of Exxon, an entity with a poor record of accounting: overstatement of pre-contract costs by close to US$100 Mn; improperly and secretly negotiating away US$211 million of audit-disallowed expenditure; failure to account for money paid by Shell for its share in the Block; and by Hess and CNOOC for theirs. It has masterminded an opacity around the share of profit oil beyond the comprehension of every Guyanese, professionals included. One looks forward to its financials with the same confidence as the initiate at a three-card-trick table.

Conclusion

A few days from now, Guyana will be “celebrating” the 60th anniversary of its Independence. Sixty years on, this is where we stand. Demba, Alcan, Bookers and Jessel swapped for Esso, Hess and CNOOC. In place of beads and trinkets, they bring jerseys and hats with their logos; they loot our resources and give us peanuts; they buy us with school sponsorship while massaging the numbers.

Burnham warned in 1971: a flag without an economy is no independence. Jagan warned in 1986: the Petroleum Bill was a blank cheque to the transnationals. Ignored by their parties, these patriotic leaders have both been vindicated by subsequent events. We have been taken not back to 1966 but to 1833 – the wealth of the land seized, the people receiving crumbs and their offspring bearing the cost.  

No patriotic leader would allow this travesty and shame to continue. For all their faults, neither Jagan nor Burnham would have allowed this. Yet, President Ali sees it as a badge of honour that the most recent US diplomat to visit our shores boasted that he found nothing separates Ali from Routledge. A President indistinguishable from the country manager of a company pillaging our patrimony is the antithesis of independence, a shame on the otherwise proud Golden Arrowhead.

This column first appeared on chrisram.net and is reproduced with the kind courtesy of the author