Ram dismisses U.S. Ambassador’s warning over renegotiation of lopsided Exxon deal

Apr 15, 2026 News

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…says contract must be renegotiated

(Kaieteur News) – Chartered accountant Christopher Ram has firmly rejected the warnings by United States Ambassador to Guyana Nicole Theriot that any move to revisit the 2016 Petroleum Agreement, the country has with American oil giant ExxonMobil for the lucrative Stabroek Block, could send the wrong signal to investors.

In his latest column, Ram outlined that what Guyanese are seeking therefore are neither radical nor unprecedented. “They range from requiring the oil companies to bear their own corporation tax liabilities, be willing to pay withholding tax on profits, and introducing a modest mechanism that allows the State to participate more fully in periods of exceptionally high prices,” he said.

It would be recalled that the 2016 deal, the previous APNU+AFC Coalition government signed with Exxon, stipulates that the government must pay Exxon, Hess and CNOOC taxes from its share of profit oil. In addition to that, the agreement allows for up to 75 per cent of oil production is used to recover costs, the remaining 25 per cent is considered profit and is split equally between Guyana and the consortium, giving each 12.5 per cent. The consortium pays a mere 2 per cent royalty from its share to Guyana.

Ambassador Theriot during a recent interview cautioned that renegotiating the contract Guyana has with American oil major ExxonMobil sends a “terrible signal” and is a “bad idea.”

There have been local debates over the terms of the contract, triggering calls for the government to bring the oil major back to the table to renegotiate the contract even now as oil prices soar and the block is estimated to hold 11.6 billion barrels of oil; Theriot said renegotiating an already agreed contract could undermine investor confidence at a critical time for the country’s economic expansion.

However, Ram stated, “Even under less favourable conditions, many resource-producing countries revisit their fiscal regimes. Not as a breach of faith, as the Ambassador would have Guyanese believe, or worse, hostility towards investors, but as a recognition that long-term agreements must retain a measure of flexibility if they are to remain justifiable economically and legitimate politically.”

He cited that with President Donald Trump’s Israeli-led War on Iran triggering a dramatic rise in oil price, there have been heightened calls for a windfall tax on the American led consortium that owns the hugely profitable Stabroek Block. He added that the US envoy’s intervention comes at a time when public discussion in Guyana is turning to whether the existing fiscal terms still deliver a fair outcome in the face of high prices and sustained profitability.

He highlighted that at this time when Guyana is in a position to benefit from the windfall in oil prices, the country must seize every opportunity to maximise earnings from a finite resource which he believes will be gone before this generation expires.

Ram argued that in the contract Exxon applied maximum duress and the David Granger led Coalition government were not up to the task at hand.  He highlighted that exploration risk which was minimal on the signing of the Agreement has largely disappeared, reserves have been proven well beyond initial expectations, and production has entered a phase of sustained expansion.

“We must therefore reject any interference by the US Ambassador in what is a commercial, sovereign issue. We must reject too, her suggestion that Guyana is breaching the 2016 Agreement when all we are doing is calling for justice and fairness – like every other country ought to do. And that we are putting Guyana first, just like her President does for America,” Ram added.

Moreover, he noted that no unilateral action is called for. Additionally, he stressed that other actions can be taken within the existing contractual framework without undermining the viability of the Block, or the attractiveness of the investment climate.

“Since there is no intention of unilaterally amending the Agreement – which Exxon would in any case successfully challenge – the Ambassador’s comments are, at best, uninformed and must be rejected outright, and at the other end nothing less than an unwelcome interference in our country’s sovereign affairs. As our guest, the Ambassador must respect our country’s permanent sovereignty over its petroleum resources. A State that refuses to revisit arrangements that no longer reflect current realities convey weakness, while one that engages constructively and within the bounds of its agreements to secure a more equitable outcome, signals both maturity and confidence,” Ram outlined.

Further, he noted that there is a myth peddled by Exxon that the 2016 Agreement provides for equal benefits. That narrative, he stressed fails to acknowledge the economic reality when one looks behind the numbers. According to Ram, it disregards the royalty structure, the cost recovery ceiling, the payment of corporation tax by the Government on behalf of the companies, or the absence of withholding tax on distributions.

“Applying the Agreement, when the 75% cost ceiling is utilised, the Government’s share of every hundred barrels is approximately 12%, rising only to about 24% when costs fall to 40%. Over the same range, the companies’ profit-related benefit increases from about 20% to 41%, consistently and significantly exceeding the State’s share. This outcome is driven not by risk, but by a fiscal structure under which Guyana pays the companies’ taxes and collects no withholding tax on the profits they take abroad,” Ram explained.  To this end, he added that Guyana’s wider economy bears the substantial external costs of a dominant extractive sub-sector.

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• Christopher Ram, ExxonMobil, lopsided deal, Nicole Theriot, renegotiation

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