OGGN urges VP Jagdeo to end Guyana’s tax payments on behalf of ExxonMobil by amending 2016 PSA

Mar 30, 2025 Letters

---

Dear Editor,

Over the past six weeks, the Oil and Gas Governance Network Guyana (OGGN) has published several letters in the Sunday editions of Kaieteur News, informing the Guyanese public about a questionable tax arrangement between the Government of Guyana and the Stabroek Block contractor- ExxonMobil Guyana Ltd, along with its affiliates Hess Corporation and CNOOC.

According to Article 15.2 of the 2016 Production Sharing Agreement (PSA), the Contractor is subject to Guyana’s income and corporate tax laws. However, Article 15.4 stipulates that: “The Minister of Natural Resources shall pay a sum equivalent to the tax to the Commissioner General, Guyana Revenue Authority (GRA), on behalf of the Contractor, and that amount shall be considered income of the Contractor,” and “The appropriate portion of the Government’s share of Profit Oil delivered under the provisions of this Agreement shall be accepted by the Minister as payment in full by the Contractor of its tax obligations.” Further, Article 15.5 states that the GRA Commissioner General shall issue tax certificates in the name of the Contractor, evidencing the payment of income tax.

In plain terms, this means that the Minister pays the Contractor’s income taxes using Guyana’s share of profit oil, and the GRA issues tax certificates to the Contractor confirming that taxes were paid, despite no direct payment being made by the oil companies. This complex fiscal arrangement raises several critical questions:

How are these “deemed tax” payments recorded in public accounts?

What is the actual value of tax certificates issued to the oil companies?

Have these certificates been used to obtain foreign tax credits abroad, especially by ExxonMobil and Hess?

OGGN has repeatedly called on relevant Ministers and civil servants to clarify these issues. We have also asked the Attorney General to address the apparent conflict between the 2016 PSA and the 2021 Natural Resource Fund (NRF) Act, which prohibits using oil revenues to pay taxes.

The Government’s response to these concerns has been disappointing. It took more than a month to issue a response, in which the Minister of Parliamentary Affairs and Governance attempted to discredit OGGN, while failing to address our questions. The Minister has also remained silent on whether any steps have been taken to amend the Access to Information Act 2011, as recommended by the UN Human Rights Committee in 2023 (Kaieteur News, March 22, 2023). Subsequently, a letter was published by Joel Bhagwandin (Stabroek News, March 25, 2025), a consultant with past ties to ExxonMobil and a current Commissioner of the Public Procurement Commission. In his missive, Bhagwandin dismissed OGGN’s concerns as “non-issues.” We refer readers to Christopher Ram’s excellent rebuttal, “The Tax Certificate Mystery” (Stabroek News, March 28, 2025), which debunks Bhagwandin’s arguments point by point.

Rather than responding with transparency, the Government and its proxies appear committed to confusing and misleading the public regarding Guyana’s tax arrangements with ExxonMobil and its partners.

Why Vice President Jagdeo Must Act

Vice President Bharrat Jagdeo, a senior Cabinet member, plays a central role in Guyana’s oil and gas governance. According to the Official Gazette (September 11, 2020), he has “specific oversight responsibilities for finance, natural resources, and the environment.” In practice, he functions as the de facto head of Guyana’s oil and gas policy, often announcing key decisions on behalf of the government, particularly those related to the Stabroek Block and ExxonMobil. Despite this central role – and the PPP campaign manifesto promise in 2020 to “immediately engage oil and gas companies in better contract administration/re-negotiation”- VP Jagdeo has consistently refused to amend the 2016 PSA, citing the “sanctity of contract.”

Why the 2016 PSA Must Be Amended

OGGN and many international observers view the 2016 PSA as heavily skewed in favor of the oil companies, especially the provision in Article 15 that requires the Government to pay on behalf of the Contractor the taxes owed by the oil companies out of Guyana’s share of profit oil.

Based on the oil companies’ financial statements from 2019 to 2023, the cumulative income taxes declared by the companies amounted to USD 2.789 billion (GYD 581.5 billion). Over the same period, Guyana’s total share of profit oil and royalties was USD 3.628 billion (GYD 756.4 billion).

If the Government uses that sum to cover the oil companies’ taxes, then 77% of Guyana’s share of oil revenue (Profit oil plus royalties) is earmarked for tax payments, leaving just 23%, approximately USD 839 million, as the net revenue from five years of oil production (Stabroek News, June 28, 2024). The exact amount paid in taxes remains unknown, as the Government refuses to disclose how much was remitted to the GRA or deposited into the Consolidated Fund. This lack of transparency is unacceptable.

Our Call to Action

In light of these facts, OGGN urges Vice President Jagdeo to exercise his responsibility and leadership by:

Ending the practice of the Government paying taxes on behalf of ExxonMobil and its affiliates, as stipulated in the 2016 PSA;

Guaranteeing full transparency in the flow of oil revenues to the Guyana Revenue Authority and the Consolidated Fund;

Ensuring that all tax certificates issued to the oil companies are backed by actual, audited tax payments; and

Amending the 2016 PSA, resolving its conflict with the 2021 NRF Act, and invoking Article 32 (Stability Clause) to bring Exxon and its partners to the negotiating table.

Sincerely,

Andre Brandli

Kenrick Hunte

Darshanand Khusial

Joe Persaud

For the Oil and Gas Governance Network Guyana (OGGN) [www.oggn.org]

---

---