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Guyana paid $219B in taxes for Hess in 2024
Chief Executive Officer of Hess Corporation, John Hess
Kaieteur News – Hess Guyana Exploration Ltd. reported an income tax expense of $219.33 billion for 2024, and under the Stabroek Block Production Sharing Agreement (PSA), this tax was not paid by the company but covered from the Government of Guyana’s share of profit oil.
Hess’ $219.33 billion in taxes for 2024 is an increase from the $131.56 billion in 2023. For that same year, Hess Guyana recorded a staggering $840 billion in profits. ExxonMobil Guyana Limited (EMGL) is the operator of the Stabroek Block with a 45 percent interest, while Hess Guyana holds 30 percent and CNOOC Petroleum Guyana Limited holds 25 percent.
Recently, this publication reported that EMGL did not pay over $260 billion in income taxes to the Guyana Revenue Authority (GRA) for 2024. According to Exxon’s 2024 annual report, “Revenue includes non-customer revenue of G$260,155,788,763 (2023 – G$138,182,695,517) related to Article 15.4 of the Petroleum Agreement. Refer to Note 7.” The report goes on to state, “Income Tax Expense is recognised in respect of taxable profit calculated on the basis of the income tax laws of Guyana that have been enacted as of the date of these financial statements.”
For 2024, EMGL recorded an operating profit before taxation of $1.255 trillion (US$6 billion). The company reported a tax expense of $260 billion (US$1.2 billion) and a total comprehensive income of $995.1 billion (US$4.7 billion).
According to the PSA, the Stabroek Block partners are allowed to recover 75 percent of the oil produced to recover their investment costs; the remaining 25 percent is considered profit, which is split between Guyana and the Stabroek Block consortium, giving each 12.5 percent. However, the consortium pays a 2 percent royalty from its share to Guyana. From its 14.5 percent, Guyana then has to pay taxes for the oil companies.
Article 15.4 of the Petroleum Agreement 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. 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.”
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