Article 15.4 (a and b) in the 2016 Petroleum Agreement (page 39: https://www.oggn.org/wp-content/uploads/2017/12/Oct2016-Petroleum-Agreement.pdf) has the condition that the Minister agrees that the appropriate portion of the Government’s share of Profit Oil shall be accepted by the Minister as payment in full of assessed taxes by the consortium (EMGL, Hess, CNOOC). This constraining requirement that mandates the government to pay the tax of the consortium from Guyana’s share of Profit Oil presents an important case when oil taxes are larger than Guyana’s share of Profit Oil. For example, a recent letter included the idea that Guyana’s share of Profit Oil in 2023 and 2024 was less than the taxes the government paid on behalf of the Consortium (https://tinyurl.com/yjk9vcjt). In particular, total taxes in 2023 were US$1, 469.4 Million and Guyana’s share of Profit Oil was only US$1,447.7 Million, yielding a deficit of US$21.7 Million (Table 1). Similarly, the total tax in 2024 was US$2,406.4 Million and Guyana’s share of Profit Oil was US$2,249.2 Million, yielding a deficit of US$157.2 Million. Given that the sum of the deficits in 2023 and 2024 amounted to US$ 178.9 Million, this implies that prior yearprofits and/or royalties had to be disbursed to cover these deficits. Furthermore, when consideration is given to the fact that new projects will be coming on stream (Yellowtail started production, https://tinyurl. com/mt4w47yy), along with no ring fencing, and no real time auditing, this deficit condition can become another important issue for the re-negotiation of the PSA. It is therefore imperative that Guyana’s next Parliament must step-up. Future generations will hold you accountable if this blatant inequity is not corrected before the commercial quantity of this non-renewable resource is exhausted. The next Parliament must replace this lopsided contract with a more equitable and fair contract. Please get the job done for the benefit of the Guyanese people; we know who suffers in this 2016 contract!
Sincerely,
Kenrick Hunte
André Brandli
Janette Bulkan
Darshanand Khusial
Mike Persaud
Ganga Ramdas
On behalf of www.oggn.org/about a 501(c)(3) organization
