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Guyana gave up more oil cash than it earned in 2024
By: Davina Bagot
(Kaieteur News) – Guyana has found itself in a ‘quagmire of its own making’, hemorrhaging massive resources that could transform the country and the lives of its people.
The 2016 Production Sharing Agreement (PSA) with ExxonMobil and partners that is ever so often the subject of debate has resulted in Guyana losing more taxes from the three Stabroek Block partners than the entire country received in 2024.
President, ExxonMobil Guyana, Alistair Routledge
According to the financial statements for the three companies seen by this newspaper, Guyana waived a monstrous $493B in income taxes for ExxonMobil, Hess and CNOOC last year.
Exxon, the operator of the block, reported an income tax expense of $260,155,788,763 while Hess reported $209,668,605,000 and CNOOC another $22,933,000,000. Overall, the companies’ total income tax expense for the year was about $493B.
During the same period, the Guyana Revenue Authority (GRA) only paid $420B in taxes to the consolidated fund.
The recently published 2024 Auditor General Report states, “According to the Authority’s Statements of Receipts and Disbursements, the sum of $408.462 billion was estimated to be collected as revenue for the year 2024. However, this figure was revised by the Authority to $422.562 billion. Actual collections paid into the Consolidated Fund totalled $420.180 billion.”
For the period, GRA collected $40,419,470,000 in Customs & Trade Administration; $112,747,293,000 in Value Added & Excise Taxes and $267,013,555,000 in internal revenue. The total taxes received for the year however pales in comparison to the taxes the country lost from the oil giants operating in the Stabroek block.
The sweetheart deal Exxon signed in 2016 states in Article 15.1 that the Contractor (ExxonMobil) as well as its affiliates shall not be subjected to tax, value-added tax, excise tax, duty, fee, charge, or impost in respect of income derived from petroleum operations, property held or transactions except as specified under the agreement.
Further, Article 15.4 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. It should be noted that 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.
The terms of the agreement has often been criticized for its lopsided terms that extend lofty benefits to the petroleum companies while the nation struggles to fund its development priorities, turning to lending institutions for loans.
Kaieteur News reported that Guyana entered the oil era in 2019 with US$1.8 billion in debt. Six years later, that figure has skyrocketed to over US$7.7 billion, a four-fold explosion in borrowing under the current administration.
At the end of 2024, Guyana’s debt stood at US$6B but another US$1.7B was added to finance the 2025 Budget, as revealed by Vice President, Bharrat Jagdeo.
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- exemptions, Exxon, GRA, Guyana, PSA, Stabroek Block, taxes
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