Chartered accountant and commentator Christopher Ram says that the financials for three oil companies in the Stabroek Block showed that they earned five times more than Guyana did in 2023, another manifestation of what critics have cited as a grossly inequitable contract.
In his oil and gas column in last Friday’s Stabroek News, Ram presented summaries of the income statements of Esso (ExxonMobil’s subsidiary now named as ExxonMobil Guyana Limited), CNOOC and Hess to make his case.
The total profit before the “mythical tax” for the three companies amounted to G$1,624,712 of which ExxonMobil’s share is shown at 46%, Hess at G$526,236 Mn. or 32% and CNOOC at 21.8%.
Table 1.
He charged that what is clear too is that these companies have recovered their investments many times over while Guyana has to borrow billions to build roads and infrastructure, provide security, grant huge tax concessions, all because we love the foreign investors.
Table 2: Five Year revenue compilation 2019 – 2023
He said that the above Table shows how lopsided the 2016 Agreement in money terms is.
“Over the years since production began, the oil companies have walked away with the staggering sum of $3,337,760 Mn, inclusive of the tax certificate to which they are entitled. The taxes nominally payable by the oil companies, are paid by the government of Guyana but the receipt is written in the name of the respective oil company so that they can then present them to get tax credits in their own country. What a farce…”, he lamented
He added that the line `Royalties’ represent the compensation to Guyana for the petroleum extracted and sold.
“Even the quarries, the sand pits, the loggers and the gold miners are envious of a 2% royalty when some of them pay as much as 8%! A 2% royalty is one of the lowest in the world, but the Government claims without any serious understanding of contract law, that there is sanctity”, Ram argued.
He added: “So let me point out that the oil companies have earned five times more than the Government under a 50/50 profit share Agreement. It is clear that the oil companies are engaging in lopsided front-end loading to grab as much as possible, as fast as possible. While draining the natural resources of Guyana, they are squeezing every ounce of flesh and drop of blood from the body of Guyana. The government likes to boast that in 2027 and beyond we will be producing substantially more oil than we do now. That is indeed true but all the evidence from all the experts is that oil prices will begin to fall in another couple of years”.
