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ExxonMobil paid no taxes to Guyana in 2023 but reported US$656M handed over to country
Kaieteur News – A look at United States oil giant, ExxonMobil Corporation’s first-ever disclosure of payments to host governments, it appears as though the company’s Guyanese subsidiary paid US$656 million in taxes to the Government of Guyana (G0G) last year.
President Irfaan Ali
However, the reality is that Exxon is not paying income taxes in Guyana. The company has said that while it is subject to Guyana’s income tax laws, the taxes assessed on the company’s operation are paid by the government, rather than the company itself. In addition to this, Exxon is then given documentation to show that the taxes have been paid in Guyana. This arrangement is owed to the 2016 Production Sharing Agreement (PSA) the Coalition Government signed with ExxonMobil Guyana Limited (EMGL) for the Stabroek Block.
On Wednesday, September 25, Exxon made a filing disclosing that it paid US$49 billion in global tax and duties expenses – this includes US$16 billion in income taxes.
Recently, this publication reported that EMGL did not have to pay over GYD$197 Billion in taxes to the Guyana Revenue Authority (GRA) for the past two years [$138B in 2023, $59B in 2022], as the taxes were paid by the Government in keeping with the lopsided PSA.
ExxonMobil Corporation Chief Executive Officer (CEO), Darren Woods
EMGL is the operator of the Stabroek Block, with a 45% interest, while Hess Guyana Exploration Ltd. holds 30% interest and China National Offshore Oil Corporation (CNOOC) Petroleum Guyana Limited holds 25% interest. All of the block-partners enjoy a tax-free ride in Guyana.
The provision of the Stabroek Block contract which gives Exxon and its affiliates a tax-free ride in Guyana has attracted criticisms locally and internationally.
The contract states in Article 15.1 that the Contractor (ExxonMobil Guyana Limited) as well as its affiliates shall not be subjected to tax, value-added tax, excise tax, duty, fee, charge, or impost in respect of income derived from petroleum operations, property held or transactions except as specified under the agreement.
Further, Article 15.4 states that the sum equivalent to the taxes owed by the company will be paid by the Minister responsible for Petroleum to the Commissioner General of the GRA. It should be noted that the contract also allows for the issuing of a receipt to ExxonMobil, indicating that it has met the local tax requirements to avoid the burden of double taxation.
Article 15.5 of the contract states, “Within one hundred and eighty (180) days following the end of each year of assessment, the Minister shall furnish to Contractor proper tax certificates in Contractor’s name from the Commissioner General, Guyana Revenue Authority evidencing the payment of the Contractor’s income tax under the Income Tax Act and corporation tax under the Corporation Tax Act. Such certificates shall state the amount of tax paid individually on behalf of Contractor or parties comprising the Contractor and other particulars customary for such certificates.”
The Irfaan Ali-led administration has explicitly stated that due to the sanctity of the contract, the 2016 PSA will remain in place, despite the deal being labeled as ‘lopsided’. In fact, last year, President Ali, during an interview with the British Broadcasting Corporation’s (BBC) Senior Journalist Gideon Long, reiterated his administration’s position to not renegotiate the ‘lopsided’ Exxon deal.
President Ali said, “Well, I would say definitely, we did not have the best of deals, Exxon had a good deal signed by the last government.” Ali then highlighted that the sanctity of contract is “very important” to his government, adding, “And we can’t go back on that.”
Exxon’s Global Tax
Bloomberg reported that Exxon paid US$7.41 billion in taxes and royalties to the United Arab Emirates (UAE) last year, which is more than any other country globally. It was stated too that ExxonMobil paid US$49 billion of global tax and duties in 2023, compared with total earnings of almost US$41 billion, according to the company (Sep 25) in a regulatory filing under Section 1504 of the Dodd Frank Act.
Indonesia, Nigeria and Malaysia were also among ExxonMobil’s top tax recipients, with combined payments of about US$10.8 billion. In the US, ExxonMobil’s largest production country, the oil giant paid US$6.6 billion, with about two-thirds going to states and local authorities and the remainder to the federal government.
ExxonMobil said the figure “does not reflect a reliable estimate” for its total US tax liability, which was more than US$10 billion, due in part to credits and payments related to prior years.
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