'Oil companies excess profits must be taxed'

‘Oil companies excess profits must be taxed’

Nov 14, 2022 News

Barbados Prime Minister says:

Kaieteur News – As countries around the globe intensify efforts to reduce the harmful emissions that drive global warming, Prime Minister of Barbados, Mia Amor Mottley has urged that the oil companies’ excess profits be taxed, to contribute to a fund which she believes could stabilize nations when climate disasters strike.

Prime Minister of Barbados, Mia Mottley delivering remarks at COP27

The Head of State was addressing her colleagues at the recently concluded 27^th United Nations (UN) climate change Conference of the Parties (COP) in Egypt, when she urged that the critical issue of loss and damage be addressed.

She was keen to note, “for loss and damage to work, we believe it can’t only be an issue of asking state parties to do the right thing- although they must- but we believe the non-state actors and the stakeholders, the oil and gas companies and those who facilitate them, need to be brought into a special convocation between now and Cop 28.”

The Barbadian leader, who has also been named one of the World’s most influential women reasoned, “How do companies make $200 billion (US) in profits in the last three months and not expect to contribute at least 10 cents in every dollar of profit to a loss and damage fund?”

Mottley pointed out that this is what her people expect, as she went on to lobby the Heads of Governments present, to convene a special convocation that includes oil companies to impress the need for such changes. As she left the stage, several leaders stood and applauded her powerful speech.

While the Barbados PM has made her position clear, Guyana’s Head of State believes that the excess profits, currently being earned by ExxonMobil, operating Guyana’s prolific Stabroek Block, should not be touched.

President Irfaan Ali was asked only on Friday if his government will be following in the footsteps of other countries to impose windfall taxes when he explained this route cannot be trotted by his administration.

The term ‘windfall’ simply refers to the excess profits being made by the oil companies as a result of the higher oil prices being earned, due to the Russia, Ukraine war.

The President said it must be understood that Guyana is a newcomer to the oil and gas sector and many countries that are implementing this tax system have been producing oil for decades.

Ali also said that in Guyana’s case, the country has an agreement which must be honoured.

“The third thing is that we are now entering a next phase of our oil development or our oil and gas development, in which there are a number of things happening on the international markets. Access to capital for projects like these is very difficult. The cost of financing for oil projects is increasing so that is the market conditions under which you are operating,” he explained.

Meanwhile, it was reported that Guyana’s oil helped the American oil major, ExxonMobil to reach a record shattering US$19 billion in the third quarter alone of 2022.

In fact, back in October, Exxon said its earnings were US19.7 billion or US$4.68 per share. This was also a significant increase over its earnings in the previous quarter which totaled a whopping US$17.9B.

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