Exxon’s profIts and Guyanese poverty

Sep 30, 2024 Editorial

Kaieteur News – Recently ExxonMobil Guyana Limited (EMGL), with a 45% interest in the rich Stabroek Block in its financial statements, reported after-tax profit of $615 billion or approximately US$3 billion. Hess Guyana Exploration Ltd. holds 30% interest, and CNOOC Petroleum Guyana Limited holds 25% interest.

This means that the three partners together walked away with approximately $1.4 trillion or US$6.5 billion in 2023.

In the meantime, the government of Guyana, that is contractually poised to benefit from 50% of the profits generated in the block, was only paid US$1.6 billion in oil revenue during 2023. Notably, this sum also includes the 2% royalty.

Then earlier this month we also reported that for 2023, the Government of Guyana (GoG) had to pay the combined sum of $306 billion in income taxes for ExxonMobil Guyana Limited and its Stabroek Block partners, Hess and CNOOC according to the companies’ audited financial statements, while for the same period Guyana earned $336 billion from its oil. This arrangement which saw the Government paying almost the same amount it earned from oil, in taxes for the oil companies last year is as a result of the 2016 Production Sharing Agreement (PSA) which Coalition Government signed with the U.S oil major. Last year, the three companies earned $1.3 trillion in profits – entirely tax-free in Guyana. However, while Exxon, Hess, and CNOOC are not required to pay taxes, the 2016 oil contract provides for the taxes to be paid to the Guyana Revenue Authority (GRA) by the Government out of its share of profit oil. All of this is happenin on the backs of Guyanese, with the blood drained out of them.

Considering Exxon’s fabulous numbers, and this country’s contribution to them, all citizens of this country must be even more determined to rise up and fight for what is rightly theirs.  Given our own impoverished state, and the plight of many citizens, there is every justification for Guyana to get more from its oil wealth, regardless of what it takes, or what must be done.

More and more, it is registering in the minds of Guyanese that their leaders will not stand up and fight for them, and when they do say something and signal something, there is the sense that their hearts are not into what they put out.  It looks like if the most that there are trying do is to pacify the people, at least those who are agitated by the messages of the few others in this country who are saying that ExxonMobil is robbing us, and that our own elected leaders have not risen to the challenge before them.

Guyana’s President,  Irfaan Ali and the oil chief, Bharrat Jagdeo have skipped around and danced inside hula hoops where renegotiation of the contract is concerned, which is why ExxonMobil can boast about its record profit.  Jagdeo the nation’s Vice President is put in charge of running this country’s oil sector, on which so much depends.  Yet, he has distanced himself (by his weak postures and unpersuasive actions) from pursuing any vigorous course of engagement.  Anything that pushes the leaders of ExxonMobil to appreciate that Guyanese are serious, and that they will not take no for an answer.  Thus, the American oil giant can bask in the glow of its gigantic profit haul from the blood of Guyana.  And Leader of Opposition Aubrey Norton despite his 20-point oil plan unveiled last week has not taken a ferocious and persistent stand that there must be change in our dealings with, and returns from, ExxonMobil.  This is why, repeatedly ExxonMobil can take home the milk and honey, compliments of Guyana’s oil.

Even the most fleeting look at ExxonMobil’s numbers, either in dollar or percentage terms, confirms how the company and its people are riding high.  The company’s management, workers, shareholders, and speculators all are doing very well.  On the other hand, the people who own this immense oil wealth, the Guyanese people, are scratching around to make a living, and this is only considering the essentials for day-to-day existence.  Their standard of living is frozen in place, their savings stand unmoving (or are depleted to make ends meet), as they live with this contradiction of being the owners of this wealth, but still growing poorer despite it.

Now, Guyanese have some choices.  They can continue to pretend to be uncaring and passive or they can be so incensed at the lopsided nature of the Guyana-Exxon relationship that they can work up the energy and passion to come out, be involved, and ramp up the pressure on local leaders so that something gives or Guyanese can electorally punish political leaders for abandoning them, and joining hands with dangerous outsiders, to destroy their hopes, kill their dreams.

ExxonMobil must make money, but not as much; and Guyana should get more, and not so little.

• Bharrat Jagdeo, Government of Guyana, Hess and CNOOC, Irfaan Ali, partners, President, Stabroek Block