Dear Editor,
Kaieteur News (January 19, 2026) carried an excellent piece of reporting `Former Finance Minister concedes Guyana was exploited by Exxon’. https://kaieteurnewsonline.com/2026/01/19/former-finance-minister-concedes-guyana-was-exploited-by-exxon/[1] The information is telling, full of practical lessons. Attributing blame is not the intention or purpose of this comment.
𝗕𝗮𝗰𝗸𝗴𝗿𝗼𝘂𝗻𝗱 (for those unfamiliar with the context): Despite being the fastest growing economy (based on GDP), there has been a lot of hand-wringing. And the reason? A lopsided Production Sharing Agreement (PSA), signed in 2016, with the Exxon consortium. Essentially, the agreement awards Guyana 2% royalty, an equal sharing of the oil profits (called profit oil) after the consortium deducts up to a maximum of 75% for exploration, development, and operating costs (called cost recovery). So: on paper, Guyana should be earning, at some later stage, a net return of 14.5% (2% royalty + 50% of the 25% left after subtracting cost recovery) or 52% government take (50% profit sharing + 2% royalty). Those returns seem more distant today than ever, so much so that a smart Guyanese has quipped, “Guyana is not awash in oil”.
𝗕𝗮𝗿𝗴𝗮𝗶𝗻𝗶𝗻𝗴 𝗽𝗼𝘄𝗲r is what determines the outcome from the negotiations with international oil companies (IOCs). In Guyana’s case, Exxon had overwhelming bargaining power, like the 10-foot-tall Goliath bearing down on the boy, David armed with only a slingshot, except that the lad triumphed. Here are a few general lessons that stick out (for technical details, the interested reader may consult my book, “𝘍𝘳𝘰𝘮 𝘙𝘢𝘨𝘴 𝘵𝘰 𝘙𝘪𝘤𝘩𝘦𝘴: 𝘐𝘴 𝘎𝘶𝘺𝘢𝘯𝘢 𝘙𝘦𝘢𝘥𝘺 𝘧𝘰𝘳 𝘵𝘩𝘦 𝘖𝘪𝘭 𝘉𝘰𝘯𝘢𝘯𝘻a”.)
𝗚𝘂𝘆𝗮𝗻𝗮’s 𝗱𝗲𝘀𝗽𝗲𝗿𝗮𝘁𝗲 𝗰𝗶𝗿𝗰𝘂𝗺𝘀𝘁𝗮𝗻𝗰𝗲𝘀: territorial controversy with Venezuela; shaky public finances, and failing industries (bauxite and sugar). Lesson: Never negotiate from a position of weakness;
𝗧𝗶𝗺𝗲 𝗽𝗿𝗲𝘀𝘀𝘂𝗿𝗲: Forced Guyana into a rushed deal with “its back against the wall”. Lesson: see #1);
𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻 𝗮𝘀𝘆𝗺𝗺𝗲𝘁𝗿𝘆: It means Exxon had superior (unshared) data such as: knowledge of the oil reserves, Guyana’s geopolitical vulnerability, and the financial pressures facing the government. Compounding this, the Guyana government did not do adequate due diligence on Exxon, did not understand reserve potential, and did not benchmark fiscal terms, as well as profitability measures like government take in other countries, although the data is publicly available. Lesson: do your homework and due diligence.
𝗣𝗮𝘁𝗵 𝗱𝗲𝗽𝗲𝗻𝗱𝗲𝗻𝗰𝘆: The government largely followed a 1999 template, agreed by a previous government that signed off on 1% royalty. Lesson: Don’t anchor expectations on old contracts.
As the sovereign owner of the resource, Guyana always retains power to say “no” to any unfair deal, regardless of the pressures. But on June 27, 2016, the government signed away the whole store: “(317) blocks to the company, instead of 60, as per industry norms.” We know today that area contains some 12 billion barrels of sweet crude. Food for thought: The Canadian province of Newfoundland had been unsatisfied with its sister province Quebec on the lopsided terms of the 1969 Churchill Falls Hydroelectric Contract. After years of disagreement, the contract was revised under the 2005 Atlantic Accord. A new government was recently elected in Newfoundland. The stance of the new government is that the 2005 deal should be rubber-stamped, but subject to review and improvement, potentially with a referendum before ratification. It’s now five years into the 2016 Exxon-Guyana 2016 PSA, which has 25 more years or so to go. Twenty-five more years of more hand-wringing and internal discontent.