Ram knocks “misleading financial statements” by oil companies

Jun 24, 2025 News

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…says Govt. also guilty of deception

Kaieteur News – Amid growing concerns over the discrepancy between Guyana’s reported oil revenues of US$2.6 billion and the US$10.4 billion in profits declared by the Stabroek Block co-venturers, Chartered Accountant Christopher Ram has said that while the country’s leaders boast about revenue inflows, the foundational elements of transparency – consolidated project accounts, proper cost audits, and consistent financial reporting are glaringly absent or deliberately obfuscated.

Ram made the comments in one of his columns published in the Stabroek News last week. He said Guyanese people remain in the dark as to whether they are receiving even the bare minimum promised under the Agreement, including their so-called 50% share of profit oil. On June 5, Yahoo Finance reported that ExxonMobil Corporation and its partners, Hess Corporation and China’s CNOOC, reported a combined profit of $10.4 billion from their oil operations in Guyana in 2024, marking a 64 per cent year-on-year jump, according to ExxonMobil’s latest operational update.

The surge was driven by expanded production capacity and favourable fiscal terms that continue to make Guyana one of the most lucrative oil plays globally, Yahoo Finance reported. “ExxonMobil alone booked $4.7 billion in adjusted earnings from its Guyana operations last year, contributing substantially to its global earnings of $33.46 billion. Meanwhile, Hess posted $3.1 billion in profits from the region, up from $1.9 billion in 2023, while CNOOC earned $2.5 billion, rising from $1.5 billion,” the article said.

Ram wrote that nearly eight years after the signing of the now-infamous 2016 Petroleum Agreement, it is clear that neither the foreign oil companies nor the Government of Guyana have any real interest in accountability. He pointed out that Annex 2 of the Agreement, which sets out the companies’ reporting obligations, is weak and ineffectual. “Reports are submitted solely to the Minister, with no legal requirement for publication or independent audit. There is no consolidated field-level financial statement, no disaggregated cost data, and no mechanism to ensure that the separately published financial statements with limited, inconsistent, and opaque information is accurate, reliable and timely. As a result, neither Parliament nor the public can verify whether the oil companies are overstating costs or underreporting profits. To correct this, Government should mandate publication of all Annex 2 statements, require independent project audits, and adopt the EITI standard in full,” Ram said.

He said what makes matters worse “is the inconsistent, and in some cases misleading, financial disclosures by the oil companies themselves – all audited by the same firm. Only CNOOC acknowledges the joint operation classification under IFRS 11 while Hess and Exxon remain silent on the nature of the arrangement.” Ram said on taxation, CNOOC correctly states that the Government pays the contractor’s income taxes out of its share of profit oil. However, he said Exxon evades the issue entirely, while Hess claims to be subject to a 25% corporate income tax, even producing a tax computation – a misleading practice at best, and a dishonest one at worst. “The contents of the Income Statements are all different. Even the reporting currency lacks consistency. Hess reports in U.S. dollars, CNOOC in millions of Guyana dollars, and Exxon in Guyana dollars. Then there are differences in treatment and disclosure of items like royalties, retirement obligations and Decommissioning and Royalties. Such differences frustrate comparability, undermine audit quality, and suggest that the companies are dictating the terms of disclosure to their auditors – not the other way around,” the chartered accountant observed.

According to Ram since the Government pays the corporate tax of all the companies from its share of profit oil, there should be no differential treatment. “Yet, the effective tax rate on the income earned by each of the companies differs significantly. This is not helped by three divergent disclosure notes, the reason for which is far from apparent. Even more troubling is the illusion of equity embedded in the so-called 50/50 profit-sharing arrangement. The financial statements of the oil companies show multibillion-dollar earnings while Guyana’s share remains comparatively meagre. The ratio for the year 2024 and cumulatively for the five years to December 2024 is in excess of 5:1.”

Deception

Meanwhile, turning his attention to the Government, Ram said the administration too is guilty of opacity, if not deception. “Public filings of Exxon and Hess in the US suggest that the Government issues them with proper tax certificates confirming the discharge of their Guyana tax obligations,” he said, pointing out that no money is paid out of Guyana’s share of profit oil and there are no oil company taxes paid into the Consolidated Fund. He said the rules of EITI, the principles of accounting, and transparency require full, complete and comprehensible disclosure. “Whichever accounting route is followed – whether the taxes are deducted before transfer to the Natural Resource Fund, or after – the outcome is equally misleading.”

Ram said because the NRF has a significant component of intergenerational funds, the Government has an interest in window-dressing the balance – to make it seem better than it is. “It is therefore comfortable manipulating the balance by not reflecting the amount of the tax required to be paid on behalf of the oil companies. The oil companies for their part, are not concerned about the small matter of accountability and transparency, or whether the Government manipulates the NFR or whether Tax Certificates are issued for money not received.”

Ram also said compounding these financial distortions is the government’s ongoing failure to enforce one of the few clear powers it has under the Agreement: the relinquishment clause. He said Exxon and Coventurers were required to surrender 20% of the Stabroek Block contract area nearly a year ago. “Instead, we are told the Ministry of Natural Resources is still “finalising” the areas to be given up.”

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• Chris Ram, CNOOC, deception, ExxonMobil, Financial Statements, Stabroek Block

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