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Unlimited parent company guarantee, taxes on profit oil spark protest in New York – OGGN
Members of the OGGN protesting in the streets of New York demanding a renegotiation of the lopsided Stabroek Block deal
Kaieteur News – In light of the recent ruling by Justice Rishi Persaud which granted ExxonMobil and its affiliates a stay to the Supreme Court judgment that required it to provide an unlimited Parent Company Guarantee Agreement or Affiliate Company Guarantee Agreement, the Oil and Gas Governance Network (OGGN) is demanding that Exxon not only provides said guarantee but pays taxes on profit oil.
In a protest action in the streets of New York City, OGGN is protesting the recent ruling that allows Exxon to lodge US$2 billion as a security deposit in event of an oil spill offshore Guyana. The body views that figure as wholly inadequate, since it believes that in event of a major oil spill, it will require substantially more than a paltry US$2B.
Citing the cleanup of the major oil spill in the Gulf of Mexico that has surpassed US$60B with a final estimated cost hovering around US$145B, Guyana should not be accepting anything less than an unlimited parent company guarantee as a means of ensuring that in the event of an oil spill Exxon will be responsible for the cleanup costs that will follow.
According to OGGN, Exxon, a company worth over US$430B is pushing Guyana to accept a mere US$2B parent guarantee which is less than 2% of what is required to protect Guyana from a major oil spill.
Without a proper parent company guarantee in place, Guyana risks economic decimation as it would be left to pick up the bill for an oil spill or any other catastrophic event that could occur from Exxon’s operations offshore Guyana. Guyanese taxpayers will have to pay for any cleanup activities that surpass the US$2B.
History is replete with situations where countries are left to cleanup oil spills after oil companies maneuver their way out of what should ideally be their responsibility.
OGGN is also demanding that Exxon pays taxes on profit oil. Under the 2016 PSA, neither Exxon nor its affiliates pay taxes in Guyana. In fact, Guyana has agreed to, under the taxation provisions, to pay ExxonMobil’s share of Corporation and Income Tax. As such, it would mean that Guyana foregoes each year, billions of US dollars. On top of this, documentation to this effect is then provided to the US based company allowing it to not have to pay any taxes in its home country for its earnings overseas.
The protest action in New York is expected to continue throughout the summer.
- ExxonMobil, In light of the recent ruling by Justice Rishi Persaud, New York City, OGGN, Supreme Court judgment
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