{"id":2938,"date":"2025-12-03T08:58:08","date_gmt":"2025-12-03T12:58:08","guid":{"rendered":"https:\/\/www.chrisram.net\/?p=2938"},"modified":"2025-12-03T08:58:10","modified_gmt":"2025-12-03T12:58:10","slug":"routledges-black-hole-of-mysterious-tax-certificates-part-1","status":"publish","type":"post","link":"https:\/\/www.chrisram.net\/?p=2938","title":{"rendered":"Routledge\u2019s black hole of mysterious tax certificates (part 1)"},"content":{"rendered":"\n

Every Man, Woman and Child in Guyana Must Become Oil-Minded (Column 171)<\/strong><\/p>\n\n\n\n

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

Readers will recall Column # 170 dealing with the request by three U.S. senators to ExxonMobil seeking information on the company\u2019s tax arrangements under the 2016 Petroleum Agreement. Their direct concern is whether the U.S. treasury is subsidising Exxon\u2019s operations in Guyana to the benefit of CNOOC, one of Exxon\u2019s Chinese partners in the Stabroek Block.<\/p>\n\n\n\n

Ever since that letter was made public, interest in the issue has intensified \u2013 both abroad and in Guyana. At a press conference held at the Exxon\u2019s new Guyana Headquarters in suburban Ogle, hosted by ExxonMobil Guyana\u2019s President Alistair Routledge \u2013 sporting the Guyana Arrowhead \u2013 the local media, sensing a story that finally had a Washington connection, pressed for answers.<\/p>\n\n\n\n

To a question whether Exxon would provide the information sought by the senators \u2013 and long sought by the media in Guyana \u2013 Routledge was his typical evasive self. \u201cWe haven\u2019t applied any tax credits. We are working with the GRA on paperwork on taxes,\u201d Routledge said \u2013 an insult to the intelligence of every Guyanese or person of any intellect. That single sentence has opened a window into what may be the most brazen accounting fiction in the country\u2019s history. Unless there is an intent to cook up something, the claim is neither accurate nor credible. It masks a structure so distorted that even its defenders cannot explain.<\/p>\n\n\n\n

Before we analyse his response however, let us look at another statement that is blatantly misleading \u2013 that the company continues to be cash flow negative on a cumulative basis. Was Routledge unaware that in 2024, the branch distributed some $674,454 Million and still ended the year with more funds than at the beginning of the year? <\/p>\n\n\n\n

No credit<\/p>\n\n\n\n

Back to the press conference and Exxon\u2019s and its tax practices. Unsurprisingly, Routledge tried to dismiss the drawn-out controversy as the product of paperwork. But what paperwork, he did not say. The Agreement could not be clearer. The Minister pays. The GRA issues the receipt. The obligation is discharged. That is the entire mechanism. There is no \u201cworking on paperwork.\u201d<\/p>\n\n\n\n

There is only doing it or concealing it. If, six years after first oil, the parties are still fumbling with \u201cpaperwork,\u201d it means either the Agreement has not been executed as written or it has been executed but hidden. Either way, it is a national embarrassment.<\/p>\n\n\n\n

Accounting credit<\/p>\n\n\n\n

While Routledge performs confusion in public, the financial statements of ExxonMobil Guyana Ltd., Hess Guyana Exploration Ltd., and CNOOC Petroleum Guyana Ltd. tell a different story \u2013 they are all taking the credit.<\/p>\n\n\n\n

ExxonMobil Guyana Ltd. (2024) reports: \u201cRevenue includes non-customer revenue of G$260,155.7 million \u2026 relating to Article 15.4 of the Petroleum Agreement,\u201d and recognises a matching income-tax expense. That is the classic gross-up accounting technique: record fake revenue and fake tax so the books look balanced.<\/p>\n\n\n\n

As for Hess Guyana Exploration Ltd. (2024), its financial statements disclose that \u201cA portion of gross production \u2026 is used to satisfy the branch\u2019s income-tax liability and is recognised as sales revenue.\u201d The Government\u2019s oil becomes the company\u2019s \u201crevenue\u201d and its \u201ctax.\u201d<\/p>\n\n\n\n

As for the junior, non-American Chinese partner, CNOOC Petroleum Guyana Ltd.\u2019s financial statements go even further, stating that \u201cThe Minister accepts the appropriate portion of the Government\u2019s share of profit oil as payment in full of the Contractor\u2019s income-tax liability.\u201d That language does not reflect Article 15, which requires the Minister to pay the tax to the Commissioner-General of the GRA \u2013 not merely to \u201caccept\u201d oil.<\/p>\n\n\n\n

Amazingly, in a matter as important as this, none of the companies thought it useful, let alone necessary, to disclose this little inconvenient fact.<\/p>\n\n\n\n

The black hole<\/p>\n\n\n\n

In all three cases the same pattern appears: the companies book the tax as paid, recognise it as revenue, and enjoy the credit. What happens thereafter is the black hole where Mr. Routledge wants to take us, despite the clear language of Article 15 of the Agreement: The Minister must pay to the GRA the tax charge of the oil companies out of Guyana\u2019s share of oil, is said to pay, the GRA is to issue receipts and deliver \u201cproper tax certificates in the Contractor\u2019s name\u201d.<\/p>\n\n\n\n

Article 15 states that the tax must be paid from the Government\u2019s share of oil revenue. Where, then, is the evidence of that payment? The Natural Resource Fund shows no deduction, no debit, no outflow. But no one \u2013 including the NRF investment committee and the auditors \u2013 seem to care a hoot.<\/p>\n\n\n\n

In effect, the tax exists only in the companies\u2019 ledgers \u2014 not in Guyana\u2019s public accounts. A phantom transaction generates a real benefit to the contractors, while the Government works on a certificate for a payment it never made.<\/p>\n\n\n\n

Confusion<\/p>\n\n\n\n

This confusion is not accidental. The Government\u2019s failure to manage the Agreement \u2013 or even to understand its workings \u2013 has produced a system in which no audit has been completed, no receipts have been verified, and no public officer can explain the basic arithmetic of the contract.<\/p>\n\n\n\n

The Commissioner of Information, who falls under the Office of the President, has ignored lawful requests for disclosure. The Minister of Natural Resources has neither published the tax receipts nor accounted for the debits from the Government\u2019s share of profit oil. And nothing coming out from the Guyana Revenue Authority, to suggest that it has received the taxes \u201cpaid on behalf of the contractor\u201d. This is the contract that is so sacred that it even trumps the country\u2019s sovereignty, public officials\u2019 integrity and most of all, the President\u2019s thundering commitment to review and renegotiate\u201d.<\/p>\n\n\n\n

Even a cake shop, run on a basic exercise book and a lead pencil, would manage its accounts with more care than this trillion-dollar industry. The result is a charade: a government pretending to pay, companies pretending to be taxed, and auditors pretending not to notice.<\/p>\n\n\n\n

Next week we will leave Georgetown for Houston, Texas and New York, where the parent companies of Hess and Exxon grapple with the accounting equivalent of the three-card trick outside of Demico House.<\/p>\n","protected":false},"excerpt":{"rendered":"

Every Man, Woman and Child in Guyana Must Become Oil-Minded (Column 171) Introduction Readers will recall Column # 170 dealing with the request by three U.S. senators to ExxonMobil seeking information on the company\u2019s tax arrangements under the 2016 Petroleum Agreement. Their direct concern is whether the U.S. treasury is subsidising Exxon\u2019s operations in Guyana … <\/p>\n

Continue reading “Routledge\u2019s black hole of mysterious tax certificates (part 1)”<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[288],"tags":[],"class_list":["post-2938","post","type-post","status-publish","format-standard","hentry","category-the-road-to-first-oil"],"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","wps_subtitle":"","jetpack_shortlink":"https:\/\/wp.me\/p3L0nt-Lo","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.chrisram.net\/index.php?rest_route=\/wp\/v2\/posts\/2938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.chrisram.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.chrisram.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.chrisram.net\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.chrisram.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2938"}],"version-history":[{"count":1,"href":"https:\/\/www.chrisram.net\/index.php?rest_route=\/wp\/v2\/posts\/2938\/revisions"}],"predecessor-version":[{"id":2939,"href":"https:\/\/www.chrisram.net\/index.php?rest_route=\/wp\/v2\/posts\/2938\/revisions\/2939"}],"wp:attachment":[{"href":"https:\/\/www.chrisram.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.chrisram.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.chrisram.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}