ExxonMobil Limited Guyana (EMGL), the operator of the Stabroek Block, has come under increasing scrutiny for its tax practices, with concerns raised over the company’s tax payments and its decision to funnel 15% of its earnings to the Bahamas, where it is legally registered. This move has sparked questions about whether the company is paying its fair share of taxes in Guyana.
At a recent press conference, Country Manager Alistair Routledge defended ExxonMobil’s tax contributions, insisting it would be inaccurate to claim that the company isn’t paying taxes to the government of Guyana. He explained, “While we don’t specifically pay corporate income tax, we do pay other taxes, like withholding taxes and royalties. In fact, ExxonMobil Guyana paid G$49.5 billion (approximately US$250 million) in taxes to the Guyana Revenue Authority (GRA) in 2023.”
Routledge clarified that the final figure for 2024 is still pending but emphasized that the company complies with all local tax regulations. However, he did not deny that ExxonMobil pays taxes to the Bahamas, where it is registered. He instead urged the public to focus on the benefits that the oil deal brings to the country, stating, “What’s important for the country and the investment partnership is how the contract delivers revenue. The Production Sharing Agreement (PSA) is about ensuring that the contract works for both sides, and we comply with local taxes.”
Despite these assertions, the situation remains contentious, particularly due to the terms of the 2016 Petroleum Agreement, which granted ExxonMobil a tax holiday. According to reports, since oil production began in December 2019, Guyana has lost over US$10 billion in potential taxes due to this tax exemption, while the country’s Natural Resource Fund (NRF) has received just over US$6 billion in payments, including royalties and profits.
Data from the December 2024 NRF report reveals that since 2019, US$6.05 billion was deposited into the fund, with US$786 million in royalty payments. This suggests that ExxonMobil and the Guyanese government shared approximately US$10.5 billion in profits over the past five years. However, with ExxonMobil allowed to deduct 75% of total revenue for cost recovery, the total revenue generated between December 2019 and December 2024 is estimated to have reached around US$42 billion.
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Critics argue that the terms of the PSA, including the corporate tax exemption, have allowed ExxonMobil to significantly reduce its tax burden, to the detriment of Guyana’s fiscal revenue. The PSA outlines that ExxonMobil and its affiliates are not subject to taxes on income from petroleum operations, as stated in Article 15.1 of the agreement. Additionally, Article 15.4 provides a mechanism where the government can pay taxes on behalf of ExxonMobil to the GRA, shielding the company from direct taxation on its oil profits.
While ExxonMobil maintains that it adheres to the terms of the PSA and pays various taxes, questions remain about whether the company’s tax practices align with the spirit of fairness and the long-term economic interests of Guyana.
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