Ram renews calls for Petroleum Commission

Jul 01, 2025 News

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…as ExxonM accused of profit manipulation to boost investor confidence

…says oil companies should appear before parliamentary committee every year to answer questions on performance

Kaieteur News – Most Guyanese hear that ExxonMobil raked in over US$10 billion in profit last year and assume that means Guyana got its fair share, but Chartered Accountant, Christopher Ram in his most recent newspaper column has exposed what he deemed as the oil giant’s classic profit manipulation scheme by turning billions of previously undisclosed and unaccounted costs into paper profits. And he renewed calls for the government to establishment of an independent Petroleum Commission. The government has dodged the setting up of such a commission, although it had promised to put this in place when it was campaigning for office in 2020. In fact, as recent as last year August, Minister of Natural Resources, Vickram Bharrat among other things, said that the establishment of a Petroleum Commission here now will slow down the oil and gas sector. Bharrat had said that while it sounds nice to say “put the petroleum commission in place” the advantages and disadvantages must be considered.

Ram said Guyana can meet its low threshold of “better contract administration” by insisting on linking the reported financial performance of the separate companies with the ministerial audits provided for under the PSA; the disclosure of the unrecovered costs in the financial statements of each of the companies; clarify that recoverable costs are not duplicated; and that the oil companies set up a decommissioning trust fund that is jointly managed by Guyana and the oil companies.

“By June 30 of each year, the oil companies and the Ministry should come before the Economic Affairs or the Natural Resources Committee of the National Assembly to answer questions on the past year’s performance.” Ram is of the firm opinion that the Ministry of Natural Resources is neither equipped or independent of the oil companies to trust it to continue as the regulator of the sector. “If Exxon can try to deceive their own shareholders and the financially literate investor press in the USA, we at least should establish a Petroleum Commission that is competent and independent and free from political influence,” the chartered accountant stated.

Wall Street investors

Meanwhile, Ram told Kaieteur News that his investigation has shown that in 2024 alone, 165 oil lifts from the Stabroek Block worth over US$13 billion went to cost recovery, yet this “magically showed up as new earnings in the financial statements of ExxonMobil.

He said this was done to keep shareholders and Wall Street investors smiling. “The trick goes deeper. Non-cash expenses like depreciation, amortisation and decommissioning are used to inflate operating costs, justifying more barrels for cost recovery,” Ram told this newspaper.

Exxon Mobil Corporation and its partners, Hess Corporation and China’s CNOOC, recently reported a combined profit of US$10.4 billion from their oil operations in Guyana in 2024, marking a 64% year-on-year jump, according to ExxonMobil’s financial statement. The surge was driven by expanded production capacity and favorable fiscal terms that continue to make Guyana one of the most lucrative oil plays globally, Yahoo Finance had reported. ExxonMobil alone booked US$4.7 billion in adjusted earnings from its Guyana operations last year, contributing substantially to its global earnings of US$33.46 billion. Meanwhile, Hess posted US$3.1 billion in profits from the region, up from US$1.9 billion in 2023, while CNOOC earned US$2.5 billion, rising from US$1.5 billion.

Kaieteur News and other commentators have queried based on Exxon’s financial statement how it was possible for the oil major and its partners in the Stabroek Block to walk away with US$10.4 billion, while Guyana received a mere US$2.6 billion, despite a 50/50 profit sharing and Guyana’s 2 per cent royalty agreement. The Ministry of Natural Resources later issued a statement claiming that most of the US$10.4B represented cost recovery. Kaieteur News had queried based on Exxon’s financial statement how it was possible for the oil major and its partners in the Stabroek Block to walk away with US$10.4 billion, while Guyana received a mere US$2.6 billion, despite a 50/50 profit sharing and Guyana’s 2 per cent royalty agreement.

Manipulation

Commenting on the disparity, Ram said the oil giant is engaged in profit manipulation. He referenced the massive deferred tax liabilities, which the oil companies- Exxon, HESS and CNOOC know they will never actually pay because they are covered by the Government. He said however these appear on the books to bolster the illusion of big financial obligations. “It is a double game: shareholders think they are buying into record-breaking profits, while Guyana’s National Resource Fund reports show Guyana is still giving up barrels to cover costs that were incurred years ago,” Ram said.  He said this slick accounting exposé shows just how little Guyana’s leaders and institutions really understand the intricacies of the 2016 Petroleum Agreement. “There is no ring-fencing to stop one project’s revenue being used to finance Exxon’s other exploration activities; there is no robust, independent audit of the billions claimed for cost recovery; and there is no attempt by the auditors to force clear, IFRS-standard disclosure that would show the real split between actual profits and recycled expenses. Left unchecked, this means we risk being bled dry: by the time the wells run dry in 2057, the true wealth will have vanished while Guyana is left holding an empty barrel,” Ram said.

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• Christopher Ram, ExxonMobil, Guyana Oil, Petroleum Commission, Stabroek Block, Vickram Bharrat

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