Yesterday, Nathan Craig, a frail 80-year-old Linden man, barely able to stand, let alone walk, was brought into our office. Craig’s appeal for his pension was heard fourteen years after it was lodged in 2010. No sooner had he won, than the heartless NIS lodged an appeal to a non-existent Commissioner of National Insurance.
Here we have Mr. Craig, penniless and fragile, deprived of his rights by an NIS whose strategy is to wait pensioners out. His story is not dissimilar to Zainul’s, the carpenter whose success in court angered the NIS, the AG and the Government, all of whom have left him out to dry. Zainul is paying the price for his less than honest employer, the NIS and the AG’s chambers. Craig is paying the price for the failure of the President to perform the simple task of appointing the Commissioner of National Insurance and the refusal of the NIS to follow the law laid down in an earlier judgment of the Chief Justice.
The whole purpose of the NIS was to provide financial relief for the elderly through the contributions of the workers and their employers. The duty of the NIS was to oversee the employers and to maintain accurate records of contributions. Partly because of political control, poor management and its failure to carry out its statutory functions, the NIS has caused grief and suffering to probably tens of thousands of contributors, many of whom departed this world without justice.
For one thing: it is not currently for want of money. The NIS’ financial fortunes began to rise with the influx of highly paid persons in the expanding economy. The injection of the $10 Bn was like a bonus and could have been used to address many of the Scheme’s more fundamental problems. Instead, the staff of the NIS are bullying and blackmailing aggrieved persons into giving up their right to a pension in exchange for a one-off grant.
An ailing octogenarian (Craig) must now wait for the appointment of a Commissioner of National Insurance for the NIS appeal to be heard! Zainul, a septuagenarian, has to wait for the opportunity to climb those high court stairs again. And let us not forget Julia Clarke who may have to wait another six months for the NIS to respond to her lawyer’s letter.
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.
The PNC is dead. Long live the PNC. As Hoyte did in 1992, Aubrey Norton repeated the show of its party’s resilience on Sunday evening with a huge turnout at its 2025 elections campaign launch at the Square of the Revolution. It must trouble the PPP/C that for all its confidence from endorsements from recent members of the APNU/PNC, from several cash grants with promises of more to come, from the convenient attendance of tens of thousands of part-time workers at its events, and the demonising of David Hinds, that the PNC-R, or APNU could attract such a crowd.
Regardless of what many thought and still do of Norton, he is the leader of a huge segment of the population that the PPP/C sees as a commodity open to transaction, provided they stay in their place. Treat Norton with disrespect and you disrespect all the 217,920 persons who voted for the PNC and their young children who have now reached voting age. The word is that Norton has his own autocratic inclination but one thing for sure, the Government will not be run from Congress Place.
Norton’s choice of Juretha Fernandes, a young Amerindian woman from Bartica, the holder of a BSc in Economics and MSc in Public Administration as his prime ministerial candidate, is an inspired choice for many reasons – gender, ethnicity, substance, competence, independence and integrity. By contrast, PM Mark Phillips is appointed with an unmountable dark-tinted glass ceiling placed before him, with its own shade of racism. In fact, even as the constitutionally prescribed first Vice President, the PM struggles to make it into the inner cabinet of five.
Fernandes immediately placed on the front burner the relentless rise in the cost of living over the past four years to which the Government’s only response were periodic cash grants rather than adequate management. It appears that the PPP/C fails to realise that without other measures, cash grants drive the cost of living higher still.
It was also good to hear that the Ticket will act on the Access to Information Act, a fundamental pillar of democracy and good governance, another guardrail torn down by the PPP/C. Addressing this pillar will make the society more open, more democratic and more vibrant.
The Ticket made some expansive promises on Sunday night, premised on higher petroleum revenues. The Ticket will need to rely on more than production. Guyanese need to hear from Norton and Fernandes whether they are committed to holding a commission of inquiry into the 2016 Agreement as a prelude to its renegotiation.
The PPP/C might be glad that the two main speakers did not raise the issue of the 2016 Agreement for which Bharrat Jagdeo before the PPP/C took office in 2020 had used the words “they sold us out”. The only thing that has changed is that Jagdeo has gone from being a critic of the Agreement, which lasts until the late 2050’s, to being an enabler. Yet, Exxon, Hess and CNOOC have begun taking money out of Guyana. Jagdeo and Ali no longer seem to care that the so-called profit share from oil is barely enough to pay the very taxes owed by the oil companies themselves, and to build the roads and infrastructure needed for those same companies to extract our most precious economic asset.
However, the PPP/C might care to respond to the Launch, it showed that Norton leads a party and a Ticket that has the capacity to organise, mobilise and galvanise its support base. The consolidation of those constituencies represented by Norton, Fernandes, Hinds and others will pose a serious headache for the PPP/C. It might even have to wonder about the point about all those handouts, cash grants and ribbons cutting.
Then it faces a challenge from Azruddin Mohammed, scion of a wealthy Muslim family. From financier to political competitor and rival for the presidency, young Mohammed has created a buzz – which maybe only Walter Rodney ever matched – potentially shaving votes from two historically solid PPP constituencies disillusioned by the status quo – the Muslims and the Amerindians.
That is a headache which the PPP can ill afford. Its response in having its supporters and part-time workers disrupt Mohamed’s meetings in the presence of an unresponsive Police is counter-productive and dangerous. The last thing Guyana needs now is even the suspicion implicating the PPP/C in political violence, such as the Mon Repos market incident.
As other issues regarding the PPP/C’s management are placed under the microscope, such corruption, the gas to energy project, its treatment of NIS retirees, and landowners whose property has been acquired at well below market price, the political tide will ebb and flow.
In Guyana we always think that our politics is unique. Yet, the words of former British Labour Prime Minister Harold Wilson that “A week is a long time in politics”, seem to apply with dramatic force to Guyana.
Business and Economic Commentary By Christopher Ram
Introduction
Part 1 looked at the contrasting visions of President Irfaan Ali and Mr. Paul Cheong, Ali’s choice for CEO of the beleaguered state-owned GuySuCo, articulated within weeks of each other. As Chief Executive Officer, Cheong unveiled a seven-point plan for the sugar industry, announcing a bold 2025 target aimed at – implausibly – doubling sugarcane yield and securing the sector’s long-term sustainability.
President Ali’s vision seems to change with every pronouncement, his latest being diversification into rice, corn and cassava. In 2020, we heard that Dubai would partner with Guyana to revitalise the industry and make it profitable. Then we heard it would be the Indians, then the Cubans, then the Brazilians. Last year, Ali told the Caribbean Investment Forum that Guyana aims to supply all the sugar the Caribbean needs within two years. A few weeks ago, the slogan was to “make sugar great again” – even as corn, rice, and livestock were added to the mix, as if sugar skills were somehow automatically transferable. These are head-spinning changes that are too difficult to make sense of, let alone implement.
Shuttered estates
We should not forget the overriding 2020 elections campaign promise, repeated by the newly appointed Minister of Agriculture when he announced the appointment of a turnaround specialist as CEO to lead the Conditional Survey ahead of reopening the shuttered Enmore, Rose Hall, and Skeldon Estates. That CEO has since moved upwards, production has moved downwards, and confusion all around. The reality is that since the PPP/C returned to power in 1992 – with a break of five years of the Coalition – GuySuCo has staggered along in crisis, surviving only because of costly, endless bailouts.
Sugar has been in decline for decades. The Parvatan Commission of Inquiry traced GuySuCo’s production history back to 1940, when the industry produced 155,800 metric tonnes of sugar, rising to 327,400 tonnes by 1960. Between 1960 and 1981, production regularly topped 300,000 tonnes, with only six years falling below that level. But the decline was already set in motion: between 2005 and 2015, production never crossed 230,000 tonnes. Then came the dramatic slide – by 2024, production was down to 47,130 tonnes, and the first crop of 2025 fell to just 15,000 tonnes.
The gambler
Ignoring Kenny Rogers (Know when to walk away, and know when to run), the government keeps pouring good money after bad. It is estimated that the sugar industry has cost this country about one hundred billion dollars over the past decade – and that is a conservative figure, ignoring hidden subsidies, debt write-offs, free land, and all the opportunity costs of what that money could have built instead.
The repeated justification is that thousands of rural workers depend on sugar. In fewer and fewer communities, that remains true – but the reality is that many traditional workers have little appetite for this backbreaking, low-paid work in today’s Guyana. The fact is that even the reduced industry is facing a labour supply crisis – the younger generations, mostly Gen Z, want modern, less punishing livelihoods. They have not gone to school to become cane cutters, by whatever name called. Low recruitment rates are worsened by persistent absenteeism. It means that the promise of “protected jobs” has become more political than practical.
Meanwhile, the industry’s governance remains a structural weakness. GuySuCo is kept on life support by taxpayers but remains under political control – the government appoints both the Chair and the CEO. This ensures that every major decision is at best a political compromise, not a sound business choice. The Parvatan Report’s blunt assessment – that the government’s heavy hand prevents real turnaround – has proved accurate year after year.
The perpetuator
No amount of money or slogans will solve this. With oil money flowing, only the return of the PPP/C in the September elections will ensure this irrational cycle of promises, wasteful spending, and poor performance continues. It is an expensive pattern that Guyana cannot afford forever. A new administration genuinely committed to sound economics, independent management and fiscal responsibility must break the cycle.
The opportunity of windfall oil wealth does not erase basic economic truth. For every billion dollars spent to prop up GuySuCo’s outdated model, billions are diverted from roads, water, schools, hospitals, technology training, rural diversification and transport – all increasingly urgent needs. The opportunity cost is vast and must not be forgotten, even though it is rarely stated plainly.
The problem solver
There is a way out. The PPP/C did not reopen the estates, and its supporters went about their lives. It can do what the Coalition once did – face reality. A credible first step would be to establish an impartial Commission of Inquiry to recommend on the remainder. Estates that are structurally unviable must be formally and permanently closed. Viable assets must be opened to credible, well-regulated private investment, with binding safeguards for workers and communities. Large sections of estate lands should be transferred or leased to workers, communities or co-ops who can diversify into rice, corn, cassava, livestock or modern agro-processing – matching today’s workforce, not the workforce of the 1940s. The entire corporation must be run by an independent, professional board, free from the revolving door of political patronage. Workers must also have real transition pathways – upskilling, alternative livelihoods, and proper support for those who want to move on from the cane fields.
If the government is serious about rural development and food security, it must stop confusing emotional slogans with economic truth. “Making sugar great again” will not work if we continue to pretend this failing model can be fixed by pouring in more taxpayers’ money.
Until GuySuCo’s fundamental flaws are faced honestly, the same bitter pattern will repeat: more bailouts, more promises, and no real answers.
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.
