From Upper Mazaruni to Gas-to-Energy: A history of failures

For almost every decade since Independence, Guyana has produced a project that promised transformation and delivered disappointment, and sometimes disaster. The 1970s had the Upper Mazaruni hydroelectric scheme and the Feed, Clothe and House programme. Later came nationalisation followed by Skeldon, Amaila Falls, the Specialty Hospital and a succession of initiatives that were supposed to alter the country’s economic future. Different leaders conceived them. Different ideologies inspired them. Different circumstances surrounded them. Yet they shared a common characteristic. They all promised transformation only to founder on the rocks of poor planning, weak financial management and inadequate execution.

The problem was seldom ambition. Guyana has never lacked ambition. Governments of every political persuasion have demonstrated a willingness to think big, spend big and promise big. The recurring weakness has been the inability to convert these into results. Costs exceed estimates. Timelines slip. Financing arrangements change. Assumptions prove unrealistic. Expectations outrun capacity. Some projects fail outright. Others survive but deliver substantially less than promised. The lesson from half a century of experience is not that Guyana should stop thinking big. It is that vision without planning, discipline and execution is often an expensive illusion.

That history deserves attention as the Government returned to Parliament this week seeking an additional $54.9 billion, including approximately $19 billion for the Gas-to-Energy Project. The issue is not the legality of supplementary appropriations. Governments sometimes require additional resources during the course of a fiscal year. The issue is competence. Four months after Parliament approved a budget of $1.558 trillion, one of the most important projects in the country’s history requires another substantial injection of public money.

If there is one project in Guyana whose financing requirements and implementation timetable ought to be known with a high degree of certainty, it is this one. It is expected to come on stream this year. As projects move towards completion, uncertainty should diminish rather than increase. Contracts are in execution. Costs should be clearer. Financing requirements should be better understood. Mature projects should become easier to forecast.

What makes the situation particularly troubling is that no project in Guyana’s history has enjoyed greater advantages, and limitless resources. President Ali retains responsibility for finance and remains the ultimate custodian of the country’s fiscal architecture. Vice President Jagdeo owns the policy dimensions of the project and has been its most visible advocate. Prime Minister Phillips is responsible for its execution and implementation. Dr Ashni Singh is responsible for financing, budgeting and appropriations. Few projects have enjoyed such concentrated political oversight. Few projects have had access to so much expertise, authority and information. If any project should have benefited from rigorous forecasting, disciplined budgeting and careful financial management, it is this one.

Yet four months after Parliament approved the budget, the Government is seeking another $19 billion for the project. The significance of that request lies not in the amount itself. Guyana has the money. Oil revenues have altered that reality. The significance lies in what the request reveals about the systems responsible for planning, forecasting and managing public expenditure.

Dr Ashni Singh has built his public reputation on competence in fiscal management. Few ministers have projected greater confidence in their command of public finance, budgeting and macroeconomic management. Guyanese have repeatedly been invited to judge the Government’s stewardship by the quality of its management of the public finances. The supplementary request therefore raises an unavoidable question. Were the original estimates wrong, or was Parliament presented with figures that should never have inspired confidence in the first place? Neither answer reflects well on those responsible for preparing and defending the numbers.

In any serious organisation, a variance of this magnitude on a flagship investment would trigger difficult questions. How were the original estimates prepared? What assumptions proved wrong? Why were the financing requirements not foreseen? What controls failed? Yet in Guyana’s public sector, departures from approved estimates increasingly risk becoming normalised. The danger is not the additional expenditure itself. The danger is the gradual acceptance of lower standards of planning and accountability, at the highest levels of the Administration.

The implications extend far beyond Gas-to-Energy. If the State encounters difficulties forecasting the financing requirements of a project receiving direct attention from the President, the Vice President, the Prime Minister and the Minister of Finance, what should citizens expect elsewhere? Should anyone be surprised when problems emerge at NDIA, CHPA, GPL, GWI, Public Works or the regional administrations? Those agencies operate with fewer resources, less political attention and weaker technical capacity. Gas-to-Energy should represent the gold standard of public administration. If the gold standard itself is revealing weaknesses in planning and execution, then the deficiencies evident elsewhere in the public sector do not surprise.

For decades governments explained failure by reference to a shortage of resources. That excuse has disappeared. Guyana now has money. It has access to technical expertise and advice. It has political stability. Most importantly, it has a project that enjoys the direct attention of the President, the Vice President, the Prime Minister and the Minister of Finance.

If under those circumstances one of the country’s most important projects still requires an additional $19 billion only months after the budget was approved, then Parliament and the public are entitled to ask difficult questions. Not about the project alone, but about the quality of the planning, budgeting and financial management that underpin it. And they expect answers from those responsible.

The Government has assembled what it should regard as its strongest team. The project has enjoyed every conceivable advantage. If this is the outcome, then the problem lies beyond money and resources. That is the ultimate disaster.

This column first appeared on chrisram.net. It is reproduced with the courtesy of its author.

CNOOC Joins the Trillion Dollar Club

Part 2: Hess in context — and CNOOC joins the party

Introduction

Last week’s column closed on a single fact: Hess Guyana’s accumulated surplus at 31 December 2025 of GY$1.741 trillion was almost equal to all NRF deposits since first oil and larger than Guyana’s 2026 National Budget. Today’s column completes the Hess review and introduces CNOOC Petroleum Guyana Limited (CNOOC) which filed its 2025 audited statements at the Commercial Registry earlier this week. Exxon, the ultimate game player, will continue to be the last of the three Stabroek Block concession holders to release its financial statements.

Completing the Hess Picture

Three further features of the 2025 Hess accounts deserve attention:

• Hess shows revenue of GY$1,098.9 Bn. That figure must — under the 2016 Agreement and IFRS — include the income tax paid on Hess’s behalf by the Government. If it does not, the audited statements are wrong. If it does, true cash revenue is approximately GY$897 Bn, against profit after tax of GY$605 Bn — a 67 percent net margin.
• Depreciation, depletion and amortisation (DDA) of GY$183.1 billion in 2025. DD&A is a non-cash charge representing capital already recovered from cost oil — a closed loop in which the only outflow is to shareholders abroad. Worse, because DD&A is itself a recoverable cost under the Agreement, Guyana bears half of it through foregone profit oil, while the contractor treats it as a source to fund its investment.    
• Payments to the mystical “head office” of GY$408.3 billion. $126.3 Bn to pay off what was left of the advances from “head office”, and $282.0 Bn in distribution from surplus. Since all such payments are exempt from the 20% withholding tax, they are just lumped together. A manifestation of a government which favours borrowings to be repaid by taxpayers over taxing the foreign oil companies.  

CNOOC 2025 — Quietly Spectacular

CNOOC is the local branch of a British Virgin Islands intermediate of the China National Offshore Oil Corporation, ultimately owned by the State Council of the People’s Republic of China. As Oil and Gas Column 132 (June 8, 2024) noted, the intermediate parent of the Guyana Branch has a permanent capital of US$200,000. From that base, the 25 percent stakeholder reported for 2025:

• Net Sales of GY$778.4 billion, down 5 percent from 2024 — the first revenue decline of the production era. Under the 2016 Agreement and IFRS, that figure must include the income tax payable by Government on CNOOC’s behalf. If it does not, the audited statements are wrong. If it does, true cash revenue is GY$738.1 billion, profit after tax GY$463.1 billion – a 63 percent net margin. Hess on the same basis: 67 percent. The Agreement, not management, generates the number. 
• Net income before tax of GY$503.4 billion (2024: GY$553.7 billion), reduced by a deferred income tax expense of GY$40.3 billion – a non-cash charge representing future tax which under the 2016 Agreement, it will never pay.  
• Dividend to head office of GY$104.25 billion – identical to 2024, suggesting an internal distribution policy rather than a response to results.
• Retained earnings at 31 December 2025 of GY$1.434 trillion – up from GY$1.075 trillion at end-2024 and GY$648 billion at end-2023.
• Repayment of US$886 million on the parent’s US$3.5 billion credit facility, reducing the drawn balance from US$1,129 million at end-2024 to US$243 million at end-2025.

CNOOC, holder of the smallest interest in the Block – 25% – is practically debt-free. It discloses total assets of GY$1.88 trillion, while its only conventional liability is GY$72.8 Bn of trade payables. A “deferred income tax liability” of GY$174.8 Bn sits on the books, which under the 2016 Agreement it is a tax CNOOC will never pay. So too, does a decommissioning provision of GY$197.6 Bn, all of it recoverable as cost oil borne 50% by Guyana. In substance the “provision” functions as a long-dated, interest-free pool of cash that CNOOC has the use of in the meantime. The contractor has the funding mechanism; the country bears the cost.

One further comment. Hess remits its surplus principally as branch distributions; CNOOC “distributes” a fixed annual dividend and uses cash flow additionally to repay an internal parent credit facility. It does not seem to bother the Branch’s directors or auditors that Branches do not pay dividends.

Now we await the financials of Exxon, an entity with a poor record of accounting: overstatement of pre-contract costs by close to US$100 Mn; improperly and secretly negotiating away US$211 million of audit-disallowed expenditure; failure to account for money paid by Shell for its share in the Block; and by Hess and CNOOC for theirs. It has masterminded an opacity around the share of profit oil beyond the comprehension of every Guyanese, professionals included. One looks forward to its financials with the same confidence as the initiate at a three-card-trick table.

Conclusion

A few days from now, Guyana will be “celebrating” the 60th anniversary of its Independence. Sixty years on, this is where we stand. Demba, Alcan, Bookers and Jessel swapped for Esso, Hess and CNOOC. In place of beads and trinkets, they bring jerseys and hats with their logos; they loot our resources and give us peanuts; they buy us with school sponsorship while massaging the numbers.

Burnham warned in 1971: a flag without an economy is no independence. Jagan warned in 1986: the Petroleum Bill was a blank cheque to the transnationals. Ignored by their parties, these patriotic leaders have both been vindicated by subsequent events. We have been taken not back to 1966 but to 1833 – the wealth of the land seized, the people receiving crumbs and their offspring bearing the cost.  

No patriotic leader would allow this travesty and shame to continue. For all their faults, neither Jagan nor Burnham would have allowed this. Yet, President Ali sees it as a badge of honour that the most recent US diplomat to visit our shores boasted that he found nothing separates Ali from Routledge. A President indistinguishable from the country manager of a company pillaging our patrimony is the antithesis of independence, a shame on the otherwise proud Golden Arrowhead.

This column first appeared on chrisram.net and is reproduced with the kind courtesy of the author

Beyond Stratospheric – 2025 Returns for Hess

Introduction

Hess Guyana Exploration Limited – a branch of Hess Guyana Exploration Ltd., a Cayman Islands-incorporated company and 30% stakeholder in the Stabroek Block – is once again the first of the three Stabroek oil companies to file its annual returns and audited financial statements. The company was previously a wholly owned subsidiary of Hess Corporation, incorporated in Delaware, USA, until Chevron completed its acquisition of Hess Corporation on July 18, 2025, pursuant to a merger agreement signed on October 22, 2023.

Also filed at the local Registry were annual returns and financial statements for Hess Guyana (Block B) Exploration Limited, a subsidiary of a Bermuda-based company that formerly held a 20% interest in the Kaieteur Block. A note to the financial statements states that in 2023 the branch relinquished its participating interest in that block. It therefore appears that the branch has ceased carrying on business in Guyana, which under the law requires it to give to the Registrar of Companies notice of cessation within 28 days. I hope that there is no sinister motive for this omission.

With the formalities out of the way, attention now turns to the financial statements of Hess Guyana Exploration Limited itself. Unlike previous years, the 2025 statements are correctly presented in Guyana dollars. Instead of beginning with the Income Statement or Balance Sheet, this review focuses on the Statement of Changes in Equity – the financial statement that tracks how the owners’ interest in the company changed during the year. The source of the information in this Table is the audited financial statements of the branch.

Source: Audited Financial Statements

Recovery of cost, oil, and plenty of profits

The table shows that over the life of its operations in Guyana, the branch received approximately GY$717.7 billion in Head Office Contributions to finance exploration, development and operational activities. Over time, however, those sums were fully repaid. By 31 December 2025, the balance had fallen to nil, meaning Hess had completely recovered every dollar of its invested capital – not from loans or external financing, but directly from earnings generated in Guyana. And if Exxon’s repeated warnings about force majeure over any Venezuelan threat go unchallenged, companies like Hess could continue extracting wealth – tax free – from Guyana well into the last quarter of this century.

But the recovery of investment capital is only part of the story. After recording net income of GY$605.45 billion in 2025 alone, the branch reports an Accumulated Surplus of GY$1.741 trillion at 31 December 2025, up from GY$1.417 trillion in 2024.

Nor was that surplus simply money left to accumulate in the company. Between 2022 and 2025, Hess made distributions to Head Office totaling approximately GY$999.8 billion. In 2025 alone, distributions amounted to GY$408.3 billion, including approximately GY$282 billion paid directly from accumulated profits. Yet despite these enormous outflows, total equity still surged from GY$297.1 billion in 2019 to GY$1.741 trillion by the end of 2025.

Just to digress. Our Government says it will not order ring-fencing because it wants to encourage the oil companies to re-invest. How little they know!

Every other taxpayer in Guyana is subject to withholding or remittance taxes on profits transferred abroad, including deemed branch profits remitted to overseas parents. Exxon, Hess and CNOOC are exempt under the 2016 Petroleum Agreement. Put a number to it. Had withholding taxes applied to the actual and deemed remittances, Guyana would have collected approximately GY$409 billion. Instead, Guyanese taxpayers are effectively subsidising one of the most profitable oil operations in the world while some of the world’s most successful companies enjoy a virtually tax-free pipeline for exporting billions abroad to the world’s largest economy.

More outrageously still, these companies pay no corporation tax in Guyana, yet receive certificates declaring that taxes were paid on their behalf by the Government of Guyana – certificates they can then present in their home jurisdictions to avoid taxation there as well. It is a legal fiction so absurd that it borders on fraud.

Comparison with Guyana’s Natural Resource Fund

The scale of Hess’ earnings becomes even more startling when compared with Guyana’s Natural Resource Fund (NRF). In 2025, the Fund recorded profit oil inflows of G$451.2 billion, royalties of G$68.9 billion and G$3.1 billion from the signature bonus. Since inception, the NRF has accumulated approximately G$1.579 trillion from profit oil, G$232.9 billion from royalties and G$3.1 billion from the signature bonus, for total inflows of roughly G$1.815 trillion.

This means that Hess Guyana’s accumulated surplus alone – GY$1.741 trillion – is now almost equal to the total petroleum revenues Guyana has received through the NRF since oil production began. Put differently, the retained profits of a single foreign oil company are approaching the entire sum deposited into Guyana’s sovereign wealth fund. The comparison is even more striking because Hess holds only a 30% interest in the Stabroek Block. ExxonMobil holds 45% and CNOOC 25%, meaning the consortium’s combined earnings are vastly larger. Unfortunately, the accounting disclosures, unresolved audit issues and opaque financial reporting surrounding the other companies make any simple extrapolation risky.

A Comparison That Should Enrage Guyanese

And here is another comparison that should make every Guyanese seethe with anger. Guyana’s entire 2026 national budget is $1.558 trillion, yet Hess’s accumulated profits from the Stabroek Block now exceed the State’s total annual budget and are almost four times the Guyana Revenue Authority’s projected tax collections for 2026.

Only months ago, Finance Minister Dr. Ashni Singh boasted about presenting the “largest Budget ever.” Yet the retained profits of a single foreign oil company operating in Guyana now exceed the amount the Government proposes to spend on the entire country in a year. This is the real meaning of President Irfaan Ali’s obsession with “sanctity of contract” – political servitude disguised as policy. While Exxon, Hess and CNOOC reap profits larger than Guyana’s national budget, the President defends a contract so lopsided that no leader genuinely committed to his people could justify it.

The parallels with the first wave of “discovery” are chilling. Then, foreign adventurers arrived with shiny beads, disease, and promises of prosperity, only to carry away gold and wealth while the natives remained poor, dependent or dead, and received trinkets. Today, the caravels have become FPSOs, the crowns have become corporate logos, and the conquest is wrapped in production-sharing agreements instead of royal decrees. But the outcome is hauntingly familiar: Guyana’s wealth flowing outward while its leaders act as overseers for foreign extraction.

The result is a humiliating national reality: one foreign oil company can accumulate more wealth from Guyana’s oil than the Government of Guyana can spend on the entire country in a year – and the President still calls this success.

Part 2 of this column will appear on Tuesday coming.   

This column first appeared on chrisram.net and is reproduced with the kind courtesy of the author.