Baby formula, Formula 1, or Vicks Formula 44

Jun 09, 2025 Features / Columnists, The GHK Lall Column

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Hard Truths… 

By GHK Lall

Kaieteur News – What formula is Vice President, Dr. Bharrat Jagdeo talking about relative to how oil profits are shared between Guyana and the Exxon consortium? Is it the energy giving Gerber Baby formula? Is it Formula 1 motor racing engine oil? Or, is he talking about the old Vicks Formula 44 cough syrup? Whatever his secret formula, it is not working, induces pneumonia, diarrhea, and insomnia. Maybe, even a touch of dementia.

Not in me, but in Bharrat “Baby Formula” Jagdeo. Whatever his formula, whatever the profit numbers he uses, the result always brings back to the same place: Guyana is getting shortchanged. Or to paraphrase one Dr. Mohamed Irfaan Ali, the short end of the stick. The dirty and jagged end.

The year under consideration is 2024, and the issue is oil profit, i.e., profit sharing. I start with the simple, what is believed to be straightforward. Exxon Guyana’s profit haul was US$6 billion. Guyana’s was US$2.6 billion. Ignoring royalties, since when is US$2.6 billion half of US$6 billion? Keep in mind the profit sharing standard (formula) fixed in contract stone is half and half. Half for Exxon and its two partners, half for Guyana. Whatever profit formula Dr. Jagdeo has, it does not translate to half for Guyana (but less), nor half for Exxon (but more). I go deeper.

In 2024, Exxon made US$6 billion (GY$1.25 trillion), Hess reported US$4 billion, and CNOOC US$2.5 billion. Simple arithmetic indicates that the total profit by the Exxon consortium is US$12.5 billion. The figures carried by foreign media, such as Zacks Investment Research, Reuters, and MSN to name a few identify a total profit of US$10.4 billion for Exxon, Hess, and CNOOC. I use this lower profit number to address this business of a formula from Jagdeo.

Now, unless somebody says otherwise, and on irrefutable grounds, I am treating the consortium (Exxon, Hess, and CNOOC) as one half of the profit-sharing formula, and Guyana as the other. However, I now find myself not back at square one, but at a much larger square. The Exxon consortium earned US$10.4 billion in 2024, but Guyana is still stuck at US$2.6 billion as its profit. In a half and half deal, something has gone wrong with either conventional accounting, or Jagdeo’s formula. I try another approach for simplicity sake.

Subtract 75% for costs from total 2024 revenues, and the result should then be divided by two. Of the two equal profit shares that result, one goes to Exxon and its two partners in the consortium, and the other half goes to Guyana. Yet, in this oil math, oil accounting, Exxon Guyana oil reckoning, the foreign oil operators collect US$10.4 billion, while Guyana has to be satisfied with US$2.6 billion. I may be a dummy, but not so much of one, that 10.4 versus 2.6 could be seen as a 50:50 split. I dig out another commonsense spanner from my bag.

Hess has a 30% share in Exxon’s half of the partnership, but collects more profit than Guyana. In effect, Hess’s should be collecting 30% of 50% (Exxon’s half in the deal), which is really 15%, but it gets more profit dollars than Guyana. Meanwhile, CNOOC holds 25% in its partnership with Exxon, or 12.5% of the profit from the Stabroek Block, but its own profit in 2024 is almost on the same level as Guyana’s. The 2% royalty that Guyana collects nudges it past CNOOC (US$2.6 billion for Guyana, US$2.5 billion for CNOC). Pretax or net of tax, it is all the same, since neither Exxon nor Hess nor CNOOC pays any corporate taxes. Turn this profit scenario and profit-sharing inside out, or upside down, or flatten it with a steamroller. or pump it up with hydrogen, and I still end up at the same place: Guyana is falling under 50% in its 50% of profit. This is a case when half is not really half.

Last, Dr. Jagdeo can try that Houdini math of 12.5% of 25%, that what is left from revenues after 75% in costs are deducted. By any analysis, Guyana is still mired in the same place. I try working this backwards, to give Mr. Jagdeo’s formula a chance to prove itself. The 25% net remaining after costs is Exxon et al US$10.4 billion plus Guyana’s US$2.6 billion. Therefore, from US$13 billion, Guyana’s 50% portion of that amounts to US$2.6 billion. Forward or backward, and whatever Bharrat Jagdeo’s formula is, it is either one of three things. The equivalent of the Nobel Prize in mathematics and economics and physics combined. Or his version of Einstein’s relativity theory (e = mc2). Or, nothing but a load of pure bull. I know which one has the most weight, and why that alone makes it so beloved by Dr. Jagdeo.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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• Bharrat Jagdeo, Exxon consortium, ExxonGuyana, GHK Lall, Guyana Oil, hard truths

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