The Guyana Government Should Immediately Investigate The Accounting Of The Oil Companies

By Darsh Khusial

News Americas, NEW YORK, NY, Mon. Aug. 18, 2025: On July 2nd, 2025, Stabroek News published a letter from the Vice President and Chief Financial Officer, (CFO), of ExxonMobil Guyana Limited, (EMGL) disputing Chris Ram’s assertion that the 2024 financials for the Stabroek Block consortium (consisting of EMGL, HESS Guyana, and CNOOC Guyana) represent “a fundamental distortion that demands immediate investigation, attention, transparency and disclosure.” The Exxon Guyana CFO’s response to Ram’s assertion that the accounting was flawed was vague and lacking in depth. However, it contained a veiled threat in this statement: “The accusation that we manipulate accounting standards to improve our financial results is unfounded and defamatory.”

In 2024, the oil extracted and sold totaled US$18 billion. To put that in context, Guyana’s 2025 budget was US$6.6 billion. Thus, distortions in the oil consortium’s financial statements are materially significant for Guyana.

Exxon is a company valued at more than US$600 billion, making it one of the largest companies in the world. As a large US public company, its stock is owned directly and indirectly by millions of shareholders. Its primary priority is to maximize shareholder value, which is reflected in its stock price. Accusations that one of its major subsidiaries’ financials are distorted could raise doubts about the company’s valuation among analysts and shareholders. Hence, one would expect that the company would correct this matter immediately or vehemently defend its reputation by taking the matter to court, not respond through a vague letter.

Mr. Ram promptly stood by his assertions in a letter dated July 3rd, 2025, where he provided specifics on why EMGL’s accounting is indefensibly lacking. He further stated, “Exxon shows no respect for the people of Guyana, weaponizing accounting complexity to avoid informed public scrutiny.” It has been more than a month since Ram stood by his assertion, while the EMGL silence has been deafening but insightful.

The chart below, interactive copy, shows the total amount of oil produced and sold per year in US dollars, which totals US$43.5 billion. Guyana should receive a 2% royalty and a 50/50 profit share. However, if the accounting is questionable, then surely Guyana’s 2% royalty and 50/50 profit share, both derived from the oil companies’ financials, are incorrect?

In April 2019, the Stabroek Block oil contract was amended to ensure the oil companies could not claim the 2% royalty as a cost. However, in their 2024 income statements, EMGL claims a Royalty Expense of US$164 million. We note that neither HESS Guyana nor CNOOC Guyana income statements lists such an expense. Thus, instead of parroting ‘the sanctity of contract’, the government should investigate whether EMGL’s US$164 million royalty expense was illegitimate under the updated contract terms.

In 2018, Ram showed – using the oil consortium’s own financial statements – that the pre-contract costs were overstated by US$90 million or 24%. Now, Guyana’s profit share from the US$43.5 billion is approximately 12.5%, assuming costs are 75%. Thus, total cost is approximately US$32.6 billion and Guyana’s 12.5% is US$5.4 billion. If the cost were inflated by 24%, then the uninflated cost would be US$26.3 billion, which means Guyana’s 12.5% profit share should be US$8.6 billion or an extra US$3.2 billion. To put that in perspective, that is 1.5 times Guyana’s budget before oil production began in December 2019.

If one recalls, the original capital cost for Liza Phase 1 was US$4.4 billion, but after Guyanese oil expert Dr. Mangal disputed several claims, the Consortium then reduced the cost by US$700 million. It was then reduced again, to a final amount of US$3.5 billion. That is an overstatement of expense by 26%.

There is a pattern here of inflated expenses. These financial irregularities should trigger immediate investigation by any government, given the billions of US dollars at stake.

EDITOR’S NOTE: Darshanand Khusial is an executive OGGN Other executive members include Alfred Bhulai, Andre Brandli, Janette Bulkan and Joe Persaud.