Jordan pushes Govt. to engage Exxon on windfall taxes

Mar 14, 2026 News

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…as oil prices soar amid Middle East war

By Davina Bagot

(Kaieteur News) – As tensions in the Middle East continue to drive up oil prices, and with Iran this week warning countries to get ready for commodity prices to reach as high as $200 per barrel, Guyana’s Former Finance Minister, Winston Jordan is calling on the government to commence negotiations with the operator of the Stabroek Block to implement a windfall tax.

A windfall tax is levied by governments on companies that earn sudden, excessive profits due to unexpected conditions rather than core business strategy.

Guyana’s Production Sharing Agreement (PSA) with ExxonMobil and partners do not prohibit the GoG from implementing such a provision after holding discussions with the company. Guyana could however face implications for imposing any new financial measure that affects the expected revenues to be earned by the company. Since Exxon’s investment was made on a much lower trajectory, Jordan argues that government could utilise this opportunity to rake in addition revenue for the country.

In an interview with this newspaper, the former minister pointed out that under such conditions the United Kingdom (UK), Canada and even the United States previously instituted laws where they never existed to apply a windfall tax on the excessive profits that were being earned by oil companies only recently when oil prices jumped due to the war in Ukraine.

To qualify his position, Jordan explained that the ongoing conflict in Iran is likely to impact the cost of various items and materials, causing greater financial strain on government.

He said, “After all it’s the government who will also have to bear the brunt of the cost side where everything that the government will now import will carry extra cost for which the oil companies will benefit. The roads, they drive on the road and don’t pay anything. It’s the government who will have to buy bitumen and maintain those roads and import whatever they need to build the roads or the factories and kinds of things so it’s not unreasonable for the government to say that they need to benefit from part of this super profit that you are making.”

He was hesitant to suggest a specific rate at which the windfall profits should be taxed, suggesting instead that the conversation begin with the principal before moving to a fair and reasonable percentage.

Taxes could exceed NRF earnings

Brent crude oil prices on Friday reached a high of just over $100 per barrel, the highest in the last 12 months.

At the beginning of the year, Finance Minister, Dr. Ashni Singh estimated inflows from the sector at an average of just $59 a barrel.

Jordan therefore explained that Exxon will be making at least $40 more than anticipated at the beginning of the year.

He pointed out that in accordance with the PSA, Guyana is required to pay the contractor’s share of taxes from its profits earned under the agreement. Under such circumstances, Jordan noted that the country could be forced to pay taxes greater than its earnings from the sector.

“If they argue that we must pay taxes out of our share, then clearly if we were to tax Exxon, including the super profits, it may well exceed the share that we are getting…Guyana will now have to not only pay taxes out of the NRF Flow but out of the domestic sources,” the former minister said as he highlighted yet another reason for the government to pursue windfall taxes.

Beyond the impact on oil prices, Jordan emphasised the additional burdens the country will be forced to carry as a result of the war between Iran and the United States; however, while Exxon will enjoy the higher prices, Guyana’s share will not “violently go up.”

To further strengthen his argument, the former minister referenced the regulations that obtain in the gold sector. He pointed out that when gold prices exceed a certain benchmark, miners are required to pay a different percentage to government.

In this regard, Jordan called for government to approach Exxon with such reasoned arguments since they do not violate the terms of the PSA.

No windfall taxes

Back in 2024, Vice President (VP) and Chief Policy maker in the oil and gas sector, Bharrat Jagdeo maintained government’s position that windfall taxes would not be instituted at that time.

In May 2022, Kaieteur News questioned the vice president on the issue and at that time he admitted that citizens in Canada, and the United States had forced their governments to increase their royalties charged to oil operators. In the United Kingdom, the government increased the one-off tax slapped on oil companies.

At that time, this publication reported extensively on the changes in the fiscal regimes for the oil operators in those countries. Canada had moved its royalty charged between five and 40 per cent, the US in December of 2021 raised its royalty rate higher than the 18.75 per cent it had been receiving while the UK slapped a one-off 25 per cent tax on the oil companies there.

Jagdeo had told the media that the windfall tax that some countries are exploring only came after intense pressure from their populations. However, he explained why the institution of the tax could not be replicated in Guyana. “We are bound by a PSA (Production Sharing Agreement) with very specific terms on the taxation side.” To this end, he suggested “if you change the taxation here, it’s considered a breach of the contract.”

Seeking to draw a distinction between Guyana and the ABC countries, Jagdeo suggested that the oil companies would have been operating for decades in those jurisdictions and as such would have come under the standard tax regime for the respective countries within which they operate.

According to the vice president, under such a situation the parliaments of those countries could by way of legislation easily make the changes to institute for example a windfall tax. He was adamant, this is the key reason the same cannot be done in Guyana if the administration did in fact go ahead and make the legislative changes; it would be considered a breach of the contract and “we would run afoul of the agreement.”

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• Exxon Guyana, Iran, oil, PSA, windfall taxes, Winston Jordan

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