{"id":2934,"date":"2025-12-03T08:41:04","date_gmt":"2025-12-03T12:41:04","guid":{"rendered":"https:\/\/www.chrisram.net\/?p=2934"},"modified":"2025-12-03T08:41:06","modified_gmt":"2025-12-03T12:41:06","slug":"routledge-deserves-to-go","status":"publish","type":"post","link":"https:\/\/www.chrisram.net\/?p=2934","title":{"rendered":"Routledge deserves to go!"},"content":{"rendered":"\n

Every Man, Woman and Child in Guyana Must Become Oil-Minded \u2013 Column 172<\/strong><\/p>\n\n\n\n

Introduction<\/p>\n\n\n\n

Last week\u2019s column described a statement made by Alistair Routledge, President of Exxon\u2019s local subsidiary, as \u201cblatantly misleading.\u201d As I begin today\u2019s column, let me quote another statement he made at the same press conference: \u201c\u2026you will recall that, prior to 2023, we were not making profits here in Guyana.\u201d<\/p>\n\n\n\n

It genuinely pains me to demonstrate \u2013 by the company\u2019s own audited figures \u2013 how inaccurate that \u201cfactual\u201d statement is. In truth, Exxon recorded profits of G$132 billion (2021) and G$637 billion (2022). See below the cropped screenshot of the Income page issued by the company\u2019s local statutory auditors.<\/p>\n\n\n\n

It is the same income statement which directs readers to a note about the provision in the Agreement regarding the inclusion of the tax charge in revenue and a below the line equivalent deduction made purely to balance the books and to conceal the true nature of the fictitious transaction.<\/p>\n\n\n

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My anguish at the sell-out of Guyana\u2019s patrimony under the 2016 Petroleum Agree-ment \u2013 worsened by the secretive Bridging Deed that extended Exxon\u2019s rights without parliamentary scrutiny and by the padding of over US$92 million in pre-contract costs \u2013 explains my low opinion of Exxon as a corporate citizen. After the repeated distortions and evasions of its Vice-President for Finance, Mr. John Colling, and now Mr. Routledge, I can only conclude that Exxon\u2019s corporate culture has been corroded.<\/p>\n\n\n\n

For his serial misrepresentations to the Fourth Estate, Mr. Routledge has lost the confidence and respect of his hosts. Under his watch, ExxonMobil Guyana has resisted transparency, delayed relinquishment, and overseen the improper reduction of US$211 million in disallowed audit costs. In the United States, an executive facing such mistrust would have been summoned before Congress or shown the door. In Guyana, he remains a guest of honour.<\/p>\n\n\n\n

Both American contractors in the Stabroek Block claim income-tax deductions while grossing up revenue to balance their accounts \u2013 a fact clear from their own financial statements. Yet Mr. Routledge insists, \u201cWe haven\u2019t applied any tax credits. We are working with the GRA on paperwork on taxes.\u201d What does that even mean? And is it true? Are these not the same statements used in Exxon\u2019s consolidated accounts? <\/p>\n\n\n\n

From Guyana to the USA \u2013 via Europe <\/p>\n\n\n\n

In Column 171, we promised to trace those tax certificates to Houston and New York, where Exxon and Hess file their stock exchange reports. Like Banks DIH\u2019s payments to Europe routed through Miami, tax considerations make Exxon\u2019s journey far longer than necessary. Let us now begin with the understanding of a process which starts with the preparation of the oil company\u2019s tax return, followed by the issue of a receipt and a proper certificate in the name of that company. These two contractual requirements are designed to enable Exxon and Hess to claim tax credits in their home country.  <\/p>\n\n\n\n

Our next stop is The Bahamas, where Exxon keeps the Caribbean parent of its Guyana operations. The Bahamas, a tax haven with strict financial secrecy, serves as a safe harbour between Georgetown and Europe. From there, the paperwork crosses the Atlantic to Breda, in the Netherlands, home of ExxonMobil\u2019s European headquarters. And that is when the journey gets choppy. <\/p>\n\n\n\n

According to independent investigative reporting, Exxon\u2019s international tax structure is a master class in concealment. Profits from Guyana are booked through intermediate entities in The Bahamas, the Netherlands, and Luxembourg before reaching Texas. Each jurisdiction shields a layer of income, ensuring that neither Guyana nor the United States ever sees the full picture.<\/p>\n\n\n\n

The voyage then continues to Luxem-bourg for further fiscal engineering via specialised vehicles. Through this narrow vein, the oil\u2019s monetary value is metabolised until its tax content all but vanishes before crossing the pond westward to Irving, Texas, where ExxonMobil\u2019s headquarters consolidate the accounts of hundreds of foreign affiliates.<\/p>\n\n\n\n

This web of subsidiaries and partnerships is designed for one purpose: to feed Exxon\u2019s insatiable appetite to get the last drop of blood \u2013 post profits \u2013 from what a former Chevron finance director and now a Columbia University lecturer, described as \u201cthe most favorable contract I\u2019ve ever seen\u201d. The fiscal transfusion that begins with an unsubstantiated GRA tax certificate ends with an IRS tax credit, reducing Exxon\u2019s U.S. tax bill at Guyana\u2019s expense.<\/p>\n\n\n\n

Making rings around the fenceless Guyana<\/p>\n\n\n\n

The supreme irony is that while Guyana refuses to require ringfencing of exploration from production activities \u2013 the most basic practice in the oil and gas industry and a staple in accounting \u2013 ExxonMobil engages in tax ringfencing in an elaborate lattice of subsidiaries across continents to protect the profits they extract from Guyana 24\/7\/365.<\/p>\n\n\n\n

The tragedy for Guyana is that the talent pool controlling the oil sector refuses to learn, hiding behind the absurd claim that only elected officials can be trusted to manage it. This is the same Government that once promised an independent Petroleum Commission \u2013 another broken pledge. After five years, not one audit has been completed and relinquishment took a year to enforce, though both are clear obligations under the Agreement. In Parliament they even argued that a professional Commis-sion would cause duplication and delay \u2013 proof enough that these \u2018elected members\u2019 would be challenged to run a cake shop.<\/p>\n\n\n\n

Their contempt for professional oversight shows in the farce of the ministerial audits, where handpicked auditors are valued more for loyalty than competence. That is not all. As one Minister told the National Assembly, \u201cWe decided at this point in time not to give this power to non-elected people in a commission\u2026 non-elected people are in a commission because you cannot hold them answerable.\u201d The irony is lost on them: Guyana is in this unholy mess precisely because of elected members.<\/p>\n\n\n\n

Exxon applies tax ring-fencing with surgical precision, while at home our officials reject operational ring-fencing altogether, allowing costs from one field to be charged to another and deferring higher profit oil for Guyana \u2013 even as rising output is offset by falling prices.<\/p>\n\n\n\n

Conclusion<\/p>\n\n\n\n

For all of Routledge\u2019s verbal meanderings and misrepresentations, the resolution of the tax certificate mystery will harm and embarrass Guyana more than it does Exxon: properly applied, those certificates will drain the Natural Resource Fund, our inter-generation sovereign wealth fund.  <\/p>\n\n\n\n

What appears to be a technical or accounting puzzle is, in fact, the product of misguided\/non-existent policies, fragile institutions and misplaced loyalties. The asymmetry between the sharks of Exxon and the sardines of the PPP\/C government \u2013 an analogy with which the ideologues are all too familiar \u2013 is profoundly striking.<\/p>\n\n\n\n

Until Guyana recognises that sovereignty is the essence of nationhood, that professionals are bound to codes, standards and values, that competence will always trump loyalty and that politicians and elected officials are of no higher quality morally and intellectually than trained professionals, Exxon and their experts will continue to treat our leaders as no more than functionaries in a distant oil colony.<\/p>\n","protected":false},"excerpt":{"rendered":"

Every Man, Woman and Child in Guyana Must Become Oil-Minded \u2013 Column 172 Introduction Last week\u2019s column described a statement made by Alistair Routledge, President of Exxon\u2019s local subsidiary, as \u201cblatantly misleading.\u201d As I begin today\u2019s column, let me quote another statement he made at the same press conference: \u201c\u2026you will recall that, prior to … <\/p>\n

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