Over the past seven weeks, the Sunday Stabroek has published a series of letters by the Oil and Gas Governance Network (OGGN) Guyana highlighting the lopsided nature of the 2016 Production Sharing Agreement (PSA) between the Government of Guyana and ExxonMobil Guyana Ltd, along with its affiliates Hess Corporation and CNOOC. As previously reported by OGGN and others, the 2016 PSA heavily favours the oil companies at the expense of the Government and the people of Guyana – a fact acknowledged repeatedly by the current administration, including President Irfaan Ali.
Under the agreement, 75% of oil revenue is allocated for recovery of specified categories of allowable oilfield-related costs. The remaining 25%, referred to as profit oil, is shared equally between the Government and the oil companies, with the latter paying just 2% royalties on overall oil sales. A central focus of our recent advocacy is the PSA’s questionable tax provisions, which require that corporate and income taxes owed by the oil companies be paid out of Guyana’s share of profit oil. We also noted a conflict between the 2016 PSA and the 2021 Natural Resource Fund Act regarding tax payments on behalf of the oil companies.
Our attempts to obtain public clarifications on these issues – especially the flow of money from the Natural Resource Fund to the Guyana Revenue Authority (GRA) and the Consolidated Fund – have been largely ignored. Specific questions were addressed to:
• Mr. Godfrey Statia, Commissioner-General of the GRA (February 23, 2025)
• The Hon. Vickram Bharrat, Minister of Natural Resources (March 2, 2025)
• Dr. Ashni Singh, Senior Minister in the Office of the President for Finance and Public Service (March 9, 2025)
• The Hon. Gail Teixeira, Minister of Parliamentary Affairs and Governance (March 16, 2025)
• The Hon. Anil Nandlall, Attorney General and Minister of Legal Affairs (March 23, 2025)
• The Hon. Bharrat Jagdeo, Vice President overseeing Finance, Natural Resources and the Environment (March 30, 2025)
While OGGN and the public await responses, we wish to emphasize the President’s constitutional role in governing the oil and gas sector.
According to Articles 89 and 183 of the Constitution of the Co-operative Republic of Guyana, the President holds supreme executive authority and may exercise it directly or through subordinates. As both Head of State and Government, the President wields significant influence over Guyana’s executive, legislative, judicial and military branches through the powers and obligations to appoint to, and/or dismiss, from high-level government positions. While the Constitution does not spell out specific duties of the President toward the people, it specifies a variety of government duties to act in the public interest, ensure citizen welfare, and uphold constitutional rights.
November 2024 marked five years since Guyana became an oil-producing nation. The transformation has been economically dramatic. One clear indicator is the Gross Domestic Product (GDP), which measures the total value of all goods and services a country produces in a year. In 2019, Guyana’s GDP (nominal) per capita was approximately USD 6,540, according to the International Monetary Fund (IMF). By 2024, it had soared to USD 30,650 – more than quadrupling in five years – driven primarily by oil production. In 2023, oil exports accounted for 70% of Guyana’s GDP, and that share is expected to grow. The World Bank reclassified Guyana as a high-income country in 2023. But do ordinary Guyanese feel like they live in a high-income country? In 2019, the World Bank calculated that 48.4% of the population lived below the poverty line. Since then, there has been no updated data to assess whether poverty has decreased.
GDP per capita figures can be misleading. The majority of Guyana’s oil wealth is captured by oil companies, their contractors and subcontractors, and thus remains largely overseas. As OGGN outlined in our February 16, 2025 letter, total oil sales from 2020 to 2023 amounted to USD 25 billion, of which Guyana’s share was only USD 3.6 billion (14.5%), including USD 2.8 billion for taxes paid on behalf of ExxonMobil and its affiliates. Over 80% of revenue remains abroad, while Guyana’s demand for foreign currency continues to rise due to infrastructure imports and rising consumer demand. Local businesses have repeatedly reported difficulties sourcing US dollars. The Bank of Guyana has had to inject foreign currency into the market – USD 80 million in June 2024, and another USD 35 million last week – as announced by Vice President Bharrat Jagdeo. These are symptoms of Dutch disease, and the foreign currency shortage is a direct consequence of the inequitable 2016 PSA. Guyana’s oil sales abroad are not translating into sufficient domestic foreign exchange. Therefore, the 2016 PSA must be amended to ensure that a greater share of oil profits stays in-country.
Given the President’s constitutional responsibilities to promote the well-being and rights of the Guyanese people, OGGN asks the following:
1. Why has the President not appointed an independent Commission of Inquiry to investigate the signing of the 2016 PSA?
2. Why has the President not hired international tax experts to assess the legality of the tax arrangements in the 2016 PSA, including the issuance of foreign tax certificates for taxes paid by the Government on behalf of oil companies?
3. Why has the President not directed cabinet members to respond to the issues raised by OGGN, such as the conflict between the 2016 PSA and the NRF Act?
4. What steps has the President taken to address the shortcomings of the Access to Information Act of 2011, which the UN Human Rights Committee highlighted in its 2024 report?
5. Why does the President reject calls to amend the 2016 PSA? What prevents him from invoking Article 32 of the PSA to bring ExxonMobil and its partners to the negotiation table?
OGGN firmly believes that the long-term prosperity of current and future generations of Guyanese depends on fair oil contracts and responsible management of the Natural Resource Fund. We urge President Ali to act without delay.
Sincerely,
Andre Brandli
Alfred Bhulai
Janette Bulkan
Kenrick Hunte
Darshanand Khusial
Joe Persaud
For the Oil and Gas Governance Network Guyana (OGGN)
