Govt. defends Exxon and partners bagging five times more profits than Guyana

Jun 16, 2026 News

…says 50% share applies to profit oil after cost recovery instead of “total production, total revenue, or the companies’ reported financial profits.”

(Kaieteur News) – The Government of Guyana (GoG) through the Ministry of Natural Resources on Tuesday explained how the Stabroek Block partners recorded US2.5B in 2025, although the 2016 oil contract allocates a greater share of revenues to the country.

The fiscal terms mean that Guyana’s profits should exceed that of the partners, yet the three companies recorded five times the revenue that flowed into the country’s oil account in 2025.

Financial statements filed however revealed that Exxon recorded a staggering US$6B in profit before taxes, while its partners, Hess and CNOOC earned US$4B and US$2.5B respectively- some five times the US$2.5B that flowed into Guyana’s account that year.

Govt. defends Exxon and partners bagging five times more profits than Guyana

Minister of Natural Resources, Vickram Bharrat

Minister of Natural Resources, Vickram Bharrat acknowledged the public concerns stemming from the profits reported by the companies and the petroleum revenues received by the State.

He explained, “Such comparisons must be understood within the legal and economic framework of the 2016 Stabroek Block Production Sharing Agreement.”

Bharrat stated that Guyana does not receive 50% of gross revenue, nor 50% of the companies’ accounting profits. Instead, the minister noted that under the PSA, the State first receives 2% royalty on petroleum produced and sold after which the contractor is then allowed to recover approved exploration, development and operating costs, up to 75% monthly. As such, Bharrat explained that the remaining balance, known as ‘profit oil’, is divided equally between Guyana and the contractor group.

“Therefore, where the full cost-recovery ceiling is applied, Guyana’s direct cash receipt is approximately 14.5 percent of gross revenue: 12.5% from its share of profit oil and 2% from royalty,” the minister said.

He pointed out that this does not mean Guyana has been denied its 50% share; rather, the 50% share applies specifically to profit oil after cost recovery instead of “total production, total revenue, or the companies’ reported financial profits.”

Further, he explained, “It is also important to distinguish between “profit oil” under the PSA and the accounting profits reported by the companies in their financial statements.”

As such, Bharrat pointed to the reason Guyana’s profits only amounted to US$2.5B versus the companies’ US$12.5B. “Corporate profits are calculated under accounting rules and may reflect revenues, depreciation, financing structures, tax treatment and other corporate adjustments, whereas Guyana’s petroleum receipts represent the cash revenues due to the State under the PSA and deposited into the Natural Resource Fund,” according to the minister.

Additionally, Bharrat noted that cost oil should not be mistaken for profit, as this represents reimbursement of approved investments incurred to discover, develop and produce the petroleum resources.

He said that these recoverable sums will decline overtime, with a greater share of production expected to be recognized as profit oil, thereby increasing Guyana share.

In the meantime, he said “Government remains firm in ensuring that every dollar due to the country is received, that all cost-recovery claims are rigorously audited, and that petroleum revenues are transparently managed and responsibly invested for national development.”

He said that government acknowledges that the 2016 Stabroek PSA is a “legacy agreement”, which triggered the strengthening of fiscal terms, including higher royalties, lower cost-recovery limits and corporate taxation in future petroleum agreements.

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CNOOC, cost, Exxon, Financial Statements, Hess, oil, profits, recovery

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