Latest update November 23rd, 2024 1:00 AM
Contrary to VP Jagdeo’s claims… Smallest contractor in Stabroek Block made $28B more than Guyana last year
– tries to mislead shareholders on $21B in taxes country paid on its behalf – Chartered Accountant, Christopher Ram
Kaieteur News – Vice President, Dr. Bharrat Jagdeo has said more than once, that Guyana actually gets a greater take from the Stabroek Block deal than the entire ExxonMobil-led consortium leading the offshore operations.
However, Chartered Accountant and Attorney-at-Law, Christopher Ram’s most recent examination and analysis of the financial records for Exxon and its partners have evinced an entirely different story.
In his column titled, “Every Man, Woman and Child in Guyana Must Become Oil-Minded,” which is published by the Stabroek News, Ram showed for example that CNOOC, the smallest of the three contractors in the Stabroek Block, got more money than Guyana did from its own resources.
Chartered Accountant, Christopher Ram
Ram said CNOOC recorded a net profit in 2021, inclusive of the non-cash tax benefit of some $105.6B before writing off any prior year losses. By contrast, Ram showed that the revenue earned by the Guyana Government from its share of profit oil is $74.5B gross.
What also seemed disconcerting for the newspaper columnist and anti-corruption advocate is the fact that much could not be understood regarding the comprehensiveness of operating and exploration expenses for CNOOC.
In providing readers with some of the figures available, Ram noted that CNOOC, which is incorporated outside of Guyana and traces its parent to the People’s Republic of China, reported a net income before income taxes of $84.5B. This, he said, is an increase of 808.5 percent over 2020 on Net Sales of $127,494 million, which grew by a more modest 207.8 percent.
Furthermore, Ram said the branch reports expenditure on exploration activities totalling $3.6 billion. He observed that operating costs of $18.6 billion were 14.5 percent of revenue down from 40.7 percent. He said this shows the impact of oil price on the performance of oil companies and more so the bonanza which oil companies are reaping.
The Chartered Accountant said the Financial Statement gets more interesting too. He observed, “From the net income, the Statement shows a deduction of $21.1B as deferred income tax which it does not and will never pay, despite the rather misleading statement in the notes that it is ‘subject to the Guyana income tax act.’ That nonsensical position is further maintained with the statement that at the end of 2021, the company had a deferred tax liability of $16.4B ‘as it is probable that future taxable amounts will be paid.”
“The giveaway however is in the Cash Flow Statement in which the identical amount deducted in the income statement – $21.1B – is added back as a non-cash tax benefit. In other words, instead of deducting the $21.1B, that amount, which represents the tax which the Government will have to pay to the GRA on behalf of CNOOC, that sum should be added to the amount reported by the company, giving a true net profit of $105.6B.”
As it was in 2020, Ram said the financial statements reveal very little by way of disclosure. The Chartered Accountant concluded that readers are no better informed of what makes up exploration, operating costs, and the less significant general and administrative. He said, “Even the most ordinary company in Guyana produces financial statements that are more informative and reader-friendly than CNOOC’s.”
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