On October 23, 2023, Chevron announced that it had purchased Hess shares in the ExxonMobil Guyana Limited (EMGL) for US$53.0 Billion.
Recalling that Hess owned 30 percent of the company, this ownership implied that the total equity in the company is now estimated to be US$176.7B, with the remainder distributed as US$79.5B for ExxonMobil, and US$44.1B for CNOOC.
Given this change in ownership from Hess to Chevron, it is plausible to assume that Hess would have made a profit from the sale to Chevron; but Guyana received no taxes or income from this transaction. No less interesting is the fact that since Chevron invested US$53.0B in the company, it is plausible to assume that they are certainly confident that they can earn more than the US$53.0 Billion in the shortest possible time, given institutional weaknesses, an inequitable PSA, and a malleable policy environment.
Equally troubling is the fact that the Guyanese people are kept in the dark by the Government of Guyana (GOG)that does not provide answers to the Guyanese people, but responds to the interests of EMGL. In this regard, one is reminded of the action taken by the Guyana Court of Appeal to reject a bid by the Attorney General (AG) to join with ExxonMobil in the parent Company Guarantee case brought by two private Guyanese citizens, Fred Collins and Godfrey Whyte (https://www.stabroeknews.com/2023/12/21/news/guyana/ags-bid-to-join-exxonmobil-parent-company-guarantee-case-rejected-by-court-of-appeal-release/). How could the Government of Guyana not understand their responsibilities in protecting Guyana from an adverse environmental event? And why would the Government of Guyana join with a foreign owned company and take a position against the interest of the Guyanese people? This is indeed most disquieting, but thanks to the Guyana Court of Appeal for stepping in.
On another matter, it was reported that the auditors did not have access to the production information from the EMGL. Also, there was a report of the US$214.0M overstatement of expenses which reduced the Guyana profit share. And as a result, deriving the correct cost of a barrel of oil and the correct amount of profit would have been compromised, since unsubstantiated data would have been used to construct the financial statements. Therefore, the right to freedom of information, as enshrined in the Guyana Constitution, matters.
Moreover, when using our non-renewable natural resources (oil, gold, diamonds, bauxite, manganese, other), it is imperative that when these non-renewable resources are exhausted, there must be accurate records that could inform current and future generations of how careful or careless we were in managing our patrimony. We need full transparency.
Sincerely,
Dr. C. Kenrick Hunte
Professor and Former Ambassador
Article Originally Published At: https://www.kaieteurnewsonline.com/2024/01/05/chevron-and-transparency/
