How not to negotiate Petroleum Sharing Agreement: lesson from Guyana

Mar 23, 2026 Letters

Dear Editor,

Allow me to make a specific and at the same time general comment on your March 21, 2026 report, “Despite paying no tax to Guyana, Exxon shuts door to talks with Govt. on windfall taxes”.

For developing countries that are in the process of negotiating a PSA with an international oil company (IOC), study Guyana to avoid multibillion-dollar pitfalls. The agreement is so lopsided― something all, including those who are against “renegotiation”, agree ― that this country will forever remain frozen out from sharing windfall profits of the IOC (Exxon-Mobil in this case).

Many countries ― neighbouring Suriname and Trinidad & Tobago ― include in their PSAs some provision to benefit from windfall profits, like a windfall tax/ surtax on “extraordinary profits” resulting from sudden, favourable economic shocks rather than their own strategic investments. The supply shock from Iran war triggered a surge in crude prices, from around $60/bbl before the war to over $100/bbl and rising.

Under the 2016 Exxon PSA for the offshore Stabroek Block, Guyana gets not even a dull penny from the windfall. Why? The agreement prohibits the Government from altering the (fiscal) terms of the agreement, like imposing a surtax. What’s more, Exxon’s operations in Guyana is tax-free because the Guyanese Government must pay Exxon’s corporate income tax liabilities, out of its own share of profit oil. So, even if the Government was able to impose a windfall tax, it would be meaningless because the agreement makes the surtax functionally circular — the Government collects $X with one hand and hands back Exxon $X with the other. The government is essentially sending a bill to itself. You cannot come up with a better way for a poor country as Guyana and its negotiators giving away the nation’s most prized but finite natural resource. It’s tragic.

So: who benefits from windfall oil profits? Clearly Exxon and its partners. Recall: recently, at the 2026 Guyana Energy Conference, Dan Ammann (ExxonMobil VP) said in Guyana: “Then, there’s what the energy from Guyana can do to improve the lives of people all around the world…it helps lift people out of poverty and raise the standard of living of people everywhere. Guyana’s energy develops Guyana but it helps the entire (globe) and that’s what this conference is about.”

Hyperbole, of course, considering:

Guyana’s 900,000 bbl/day is not even 1% (only 0.8%) of total world oil production/consumption, hardly significant to “help the entire (globe”, “improve the lives of people around the world”; whereas
That same 900,000 bbl/day approaches one-fifth (18%) of Exxon’s global oil production (in oil equivalent barrels) making a big contribution to Exxon’s cash flow and net profit.

One hopes that going forward, Guyana’s PSAs with the IOCs include provisions to share in windfall profits, and there are many ways to do this.

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