Jordan backs calls for ring-fencing

Jan 21, 2026 News

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…says Exxon transferring all risks to Guyana

(Kaieteur News) – “I support ring fencing then and now. Were we in a better negotiating position then, I’m sure we would have insisted on it or some variant of it.”

This is the position of former Finance Minister under the A Partnership for Nation Unity and Alliance For Change (AFC) Coalition government, Winston Jordan.

During the Coalition’s tenure in office between 2015 and 2020, the government negotiated and signed a Petroleum Agreement with American oil major, ExxonMobil.

Jordan recently acknowledged that the Coalition failed to do its homework on the company which used its knowledge of Guyana to extract the best possible deal to benefit its shareholders.

Acknowledging a major flaw in the contract, he said that the lack of ring-fencing exposes Guyana to severe financial risks, protecting instead the company’s profits.

He told this newspaper, “No ring-fencing has effectively transferred all the risks of investment decisions to, and the actual search for, new oil fields from Exxon to the Government of Guyana while Exxon maintains a high premium on such investments.”

Jordan noted that while a bright and rosy future is often painted for revenue flows to benefit Guyana, the reality is starkly different.

He warned, “But without serious interrogation of what is presented to the Government that is backed by their own investigation and advice from practiced experts, the Government’s decision making will be both sub-optimal and compromised. In other words, giving up today’s bun for the long term cake would not (be) a popular decision, considering our level of poverty and development.”

The former minister was keen to note that falling oil prices in the absence of a depletion policy could wreak financial havoc for the nation, whose economy is led by growth in the sector.

He said, “Compounded by falling oil prices- whose outlook is rather pessimistic- and the lack of a depletion policy which in prolonged periods of low prices and the absence of ring fencing, would mean that far more barrels of oil would be needed to pay off Exxon’s investment.”

As such, Jordan noted that the “hoped-for” larger profit out of the agreement may prove illusory.

On Tuesday, Kaieteur News reported Jordan as saying the country may never see its full 50% profits from the 2016 Exxon deal.

In accordance with the agreement, Guyana receives 12.5% of profits. ExxonMobil is allowed to take 75% of the oil produced every month to cover its expenses and also enjoys a 12.5% profit share. In addition to its 12.5% profits, Guyana also receives 2% of gross production as royalty.

Notably, after the contractor recovers all of its expenses to develop the resources, Guyana would be eligible for 50% of all production, minus operating expenses from the projects.

With more and more developments being approved in the absence of a ring-fencing provision, the country has been receiving meager profits, delayed to facilitate cost recovery. This provision would ensure the country receive half of the profit after paying off the development costs.

In October 2023, when Brent crude prices averaged US$91, Vice President and chief policy maker for the sector, Bharrat Jagdeo explained that Guyana is foregoing revenue now to gain massive profits in the future.

He said, “We admitted that we are foregoing revenue now in exchange for massive future income because it’s going into new projects that will increase production, and so even with the same share of the 50/50, plus the two percent royalty that the future income, because of the bigger scale will be massive in Guyana’s case and we are deliberately foregoing that in this period for that purpose and then trying to grab this bone now could cause you to lose all the bones, the bigger bones too in the future.”

The current state of affairs however casts doubt on his projection of “massive” future revenues.

Jordan during a recent programme warned, “If (US President, Donald) Trump has his way of a $50 top price for oil, and at a time when production in Guyana will be ramped up to one million plus, it means that we will be in a very desperate situation and all the talk that brother Jagdeo has been telling us that we front loading and we back loading and all kinds of things will go to nought. Why? Because we will be producing more oil at a reduced price which means that we will never achieve or achieving that situation where we will be getting a higher profit share will be illusionary.”

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• Exxon, oil, oil contract, ring-fencing, Winston Jordan backs

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