& Tobago



Very usefull links


News links




Dow Jones

Oil price



Views and News






Oil companies reduces Guyana take
from 12.5 to 9%
-International expert

Table 2 demonstrates that the impact of the tax payment by the Minister of Natural Resources to the
Guyana Revenue Authority would reduce the actual take of the country from 12.5% to 9% of profit oil

By Kaieteur News

Petroleumworld 10 04 2021

The unbelievably exorbitant tax giveaways in the 2016 Stabroek Block Production Sharing Agreement (PSA) have more detrimental effects on Guyana’s actual take than what meets the eye. The International Monetary Fund, the World Bank and even the Inter-American Development Bank have said for years that Guyana petroleum deal with ExxonMobil and its partners, Hess Corporation and CNOOC Petroleum Guyana Limited, leaves the country with a 14.5 percent profit oil take.

Table 2 demonstrates that the impact of the tax payment by the Minister of Natural Resources to the Guyana Revenue Authority would reduce the actual take of the country from 12.5% to 9% of profit oil.

But a recent analysis of the deal and the impact of its tax breaks to the oil companies reveal this to be an illusion as the country’s actual take is 9 percent.

This shocking disclosure was made by the Institute of Energy Economics and Financial Analysis (IEEFA), and its Director of Financial Analysis, Tom Sanzillo in its latest report titled: Guyana’s Tax Giveaway: Country Pays Exxon, Hess and CNOOC’s Annual Income Taxes.

In that report, Sanzillo examined the impact of the exorbitant tax concessions and waivers to ExxonMobil and its partners.

According to the Stabroek Block PSA, the Government of Guyana agreed to exempt ExxonMobil and its partners, from the payment of several taxes such as Capital Gains Tax that other local companies are made to pay. And in the instances where the government has agreed to accept the payment of taxes, it has chosen to pay same on behalf of the oil companies.

In simple terms, the PSA outlines that income gained by the contractor and the other parties is taxable but would be handled by the Minister of Natural Resources. And that tax would be paid over to the Guyana Revenue Authority (GRA) from Guyana’s share of the oil money, after which, the oil companies would receive a receipt stating that the said tax was settled. This would be presented by the oil companies to the American tax authorities to prevent being taxed on their profits which are shipped from Guyana to their head offices.

The one thing Sanzillo has done that financial institutions such as the World Bank, the IMF and the IDB have not done, is consider Guyana’s actual take of profit oil in light of the tax giveaways.

The specific income tax contract provision in the Stabroek PSA.

Expounding further on the grave impact of the concessions, Sanzillo said one ought to understand how the terms of the Stabroek Block PSA allows for the calculation of profit oil between Guyana and the Exxon Mobil led consortium.

He explained that for every barrel of oil sold, 75% of the revenue earned has to go towards covering expenses. The remaining 25% is what is deemed profit oil and is split equally between the State and the oil companies, leaving each party with 12.5% of gross revenue.

The IMF had said in previous analytical reports, that when one adds the meager two percent royalties, the country’s take moves up to 14.5 percent. But what Sanzillo exposed is this take does not consider the impact of the exorbitant tax concessions on that 14. 5 percent take.

After the Minister of Natural Resources pays the taxes owed by the contractor out of its share of the profits, Sanzillo said Guyana’s take is reduced to 9 percent.

The financial expert noted that it can even be lower when one considers the other gaping loopholes for revenue leakage in the oil agreement.


By Kaieteur News /
10 03 2021

Copyright© 1999-2021 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions as the source.

Other stories you have to get authorization by its authors. Internet web links to are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!


We invite all our readers to share with us
their views and comments about this article.


Write to

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to:

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels




Editor & Publisher:Elio Ohep/
Contact Email:

CopyRight © 1999-2021 Petroleumworld- All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2021, Petroleumworld   / Elio Ohep - All rights reserved


This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.