Despite not paying taxes, Exxon boss says profit sharing and royalty is same as giving Guyana tax
Feb 13, 2025
“In effect, that profit sharing royalty is tax…so would you prefer to have 25% income tax or 52% plus of revenues effective tax to the state from the PSA?”- EMGL President, Alistair Routledge
By: Davina Bagot
Kaieteur News-Although Guyana has so far lost over US$10B in corporate taxes as a result of the lopsided terms of the 2016 Production Sharing Agreement (PSA), President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge said the country is ultimately receiving taxes through the profit share arrangement and 2% royalty requirements imbedded in the deal.
President, ExxonMobil Guyana Limited, Alistair Routledge addressing the media during the company’s Q1 press conference (Despite not paying taxes Exxon boss says profit sharing and royalty is same as giving Guyana tax)
He provided this explanation on Wednesday at Exxon’s first quarter (Q1) press conference for 2025, hosted at the company’s Duke Street, Kingston, Georgetown office. In response to a question from this newspaper, Routledge said he believes there is confusion around the use of the word ‘tax’.
He then went on to explain, “There are different forms of agreements that are used in the oil and gas industry. The one that is being implemented in Guyana is the Petroleum Sharing Agreement so it’s literally a sharing agreement where the investors invest, the government doesn’t have to make any investment up front but it shares in the profit and receives a royalty.”
As such, he continued, “In effect, that profit-sharing royalty is tax. In other systems like whether you are running a different local business, you pay corporate tax – in effect it is the same. It is giving a tax, a revenue to the state. It is remitting revenue to the state…while it is not called tax in the Petroleum Sharing Agreement in effect that’s what it is. It is payments to the state in lieu of there being a tax agreement.”
Routledge pointed out that Guyana has implemented a 25% corporate tax requirement. On the other hand, he highlighted that Guyana receives 52% in profit and royalty. To this end, he reasoned, “So would you prefer to have 25% income tax or 52% plus of revenues effective tax to the state from the PSA?”
Notably, Kaieteur News told the President of EMGL that in other jurisdictions, the company is required to pay taxes, despite making royalty and profit oil payments.
While he admitted that the company does not pay corporate taxes to the state, he noted that Exxon is still subject to pay other taxes under the Petroleum Agreement, such as withholding taxes. According to the Guyana Revenue Authority (GRA), withholding tax is income tax withheld from employees’ wages and paid directly to the Government, by the employer. To this end, Exxon boasted that some GYD$49.5B or approximately US$247.5M in taxes were paid to the GRA in 2023 alone.
Importantly, this skewed representation of the revenues received by Guyana under the 2016 PSA has already been rebutted by stakeholders, including Chief Policymaker for the oil and gas sector, Bharrat Jagdeo. Previously, when Exxon erected billboards across the country claiming that Guyana receives 52% of all profits, he said: “One thing I can agree with Vincent Adams on, is that these billboards that Exxon (is) putting up all around the place, is misleading in many ways… Exxon’s billboards are misleading. So, they said Guyana receives 52% of all profits from Stabroek Block, 50% profit share plus 2%, they don’t speak about the 75% here going to cost recovery.”
VP Jagdeo pointed out that presently, 75% of the earnings are deducted to cover cost, with the remaining 25% shared with Guyana. This means that Guyana actually receives 12.5% profit, in addition to its 2% royalty.
(Despite not paying taxes, Exxon boss says profit sharing and royalty is same as giving Guyana tax)
(Despite not paying taxes)
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