Ram finds Guyana’s oil account holding $274B in taxes yet to be transferred to GRA for Exxon & partners

Dec 30, 2023 ExxonMobil, News, Oil & Gas

– Slams Office of the President, Ministries of Finance, Natural Resources, Central Bank, Audit Office, GRA, NRF Board, National Assembly, the AG’s Chambers and others for fiasco

Kaieteur News – Chartered Accountant and Attorney-at-Law, Christopher Ram, has often lamented that Guyana’s Natural Resource Fund (NRF), which comprises royalties and profit oil sales, is overstated by tens of billions of dollars. It is bloated because Guyanese authorities have failed to comply with the provisions of the Stabroek Block Production Sharing Agreement (PSA).

Chartered Accountant, Chris Ram

That lopsided deal says Guyanese authorities will pay the Guyana Revenue Authority money to cover the tax obligations of ExxonMobil and its partners. Where exactly would Guyana get the money to do this? The very agreement states that the authorities must use a portion of the revenues made from the sale of its portion of oil from the Stabroek Block (also known as profit oil). Instead of transferring the taxes per the stipulations of the PSA, they remain in the Natural Resource Fund.

Arising from his investigative efforts, Ram outlined a bombshell discovery in his 118^th.oil and gas column published in the Stabroek News yesterday. Ram found that as at June 30, 2023, the Fund held $274.8 billion in taxes, which should have been paid over to GRA on behalf of the Exxon-headed contractor group.

In providing a further breakdown of the transfers that should have occurred, Ram said $4.1 billion should have been received by GRA for 2020, $45.6 billion for 2021, and $225.1 billion for 2022.

According to Ram, what did surprise him even more was that the nation’s Auditor General completely glossed over this fact in his 2022 financial report on the fund as he gave it a clean bill of health. Ram said, “The (2022 financial) statements said the value of the Fund at that date was G$298 billion. With taxes payable amounting to $49.7B for the years 2020 and 2021 to be financed out of Guyana’s share of profit oil, the correct value of the Fund at 31st. December 2022 should have been G$248.4B, the difference representing an overstatement of 20%. A similar overstatement for 2023 alone, amounted to a further G$225.1B, hence the cumulative overstatement of $274.8 billion.”

In a further comment to Kaieteur News, Ram also questioned the quality of the reports coming out of the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) which only months ago reviewed the NRF but completely overlooked such a grave error of omission. In his 117^th column had Ram made a veiled criticism of international organisations which seek to maintain an ongoing relationship with host governments.

Ram also slammed several government agencies, including the Office of the President; the Ministry of Finance, including the Budget Office; the Ministry of Natural Resources; the Bank of Guyana; the Guyana Revenue Authority; the NRF Board; the National Assembly and the Attorney General’s Chambers for failing to discharge their respective responsibilities to avoid this fiasco. Ram found it quite appalling that this situation has existed since at least 2021, without detection or correction.

Based on his findings, Ram said it is clear no payment for taxes on behalf of Exxon, Hess and CNOOC was made from NRF, nor was any such money accounted for in the Estimates of Receipts and Payments and paid into the Consolidated Fund. “This omission reflects poorly on the Budget Office. The irrefutable but uncomfortable conclusion is that no money was paid to or received by the Guyana Revenue Authority. This is obviously a matter for the statutory auditors (the Auditor General) and the relevant government agencies, including the Natural Resource Fund Board,” said Ram.

He added that the NRF Board headed by Major General (Ret’d) Joe Singh needs a better understanding of the funds at its disposal to assure citizens that it is capable of defending and protecting the legitimacy, accuracy and integrity of the Fund.

Chartered Accountant, Chris Ram, Ministries of Finance, National Assembly, Office of the President

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