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Exxon shortchanged Guyana $225M in royalty payments for 2023 – Professor Hunte
Kaieteur News – ExxonMobil Guyana Limited (EMGL) in 2023 reported that the total revenue generated in the Stabroek Block that year amounted to G$1,108,897, 727, 566- meaning Guyana’s royalty payment should have been G$22,177,954,551.32.
Former Ambassador and Professor, Dr. Kenrick Hunte
The country was however paid some G$21,922,725,604 as reported by Exxon in its 2023 Annual Report. Royalty is a fixed percentage of the gross value of revenue, paid to governments or the owners of natural resources. Professor and Former Ambassador, Dr. Kenrick Hunte in a letter to this newspaper on Thursday flagged that the country did not receive its full 2% royalty. Dr. Hunte explained, “The correct royalty at two percent is G$22,177,954,551.32; and therefore, there is a shortage of G$255, 228,947.32 which EMGL must pay.”
He pointed out that the country only received 1.977% instead of its 2% royalty. Consequently, Dr. Hunte cautioned policymakers, “When dealing with large numbers, especially dollar values in billions and trillions, rounding percentage figures could result in serious shortages in the millions. Please round to no less than three decimal places to avoid this unfortunate misrepresentation, and only accept after verification.”
According to the 2016 Production Sharing Agreement (PSA) Guyana signed with Exxon and partners, the county received 2% royalty on all petroleum produced and sold. Guyanese have been protesting against the low royalty rate stipulated in the agreement, demanding more royalties be negotiated by the government of Guyana. The revelation by Dr. Hunte has however exposed that the country is not being paid its fair value of royalty it should receive from the oil company.
Previously, Professor Hunte had warned that the country was not receiving its full 2% royalty. Vice President, Bharrat Jagdeo in response however explained otherwise. Jagdeo assured, “We got 2% of total sales as the royalty. What might be confusing to Hunte… is that the 2% is paid from the contractor’s profit, so in this case, the profit oil is 25%, 75% goes to cost recovery, so of the 25% of gross, that is total sales, we get 12 and a half percent. The contractor gets 12 and a half then he takes from his share of profits, 2% and pays it to government, so we end up with 14.5% of the 25% of gross and they end up with 10.5%.”
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