Chevron’s Guyana operations clash with Berkshire ethics

Dear Mr. Abel,

Congratulations on officially taking the helm as CEO of Berkshire Hathaway this year. As you guide the company into this new era, I am writing to you regarding a contradiction between Berkshire’s stated corporate philosophy and the operational realities of one of its largest equity holdings: Chevron.

As per Berkshire Hathaway’s Owner’s Manual, one assumes if you own 100% of a business or own a 6.57% interest in a freely-traded stock, the approach is the same. That is, you think of yourself as owners.

Berkshire Hathaway’s Code of Business Conduct and Ethics states that obeying the law, both in letter and in spirit, is the foundation upon which the Company’s ethical standards are built. Furthermore, the Code highlights Mr. Buffett’s famous rule of thumb, asking us to consider whether we are willing to have any contemplated act appear the next day on the front page of our local paper to be read by our families and friends.

Mr. Buffett has frequently praised “the American miracle” and expressed deep pride in Berkshire’s tax contributions, recently highlighting the staggering $26.8 billion the company paid in U.S. federal corporate income taxes. However, there appears to be a stark ideological clash when evaluating Chevron, which constitutes a massive pillar of Berkshire’s equity portfolio. Following Chevron’s 2025 acquisition of Hess, it inherited a highly lucrative 30% working interest in the Stabroek Block in Guyana.

As you may be aware, under Article 15.4 of the 2016 Production Sharing Agreement (PSA) governing the Stabroek Block, the oil consortium does not pay out-of-pocket corporate income taxes to the Guyanese government. Instead, Guyana is contractually obligated to settle these tax liabilities on the companies’ behalf using the state’s own share of profit oil.

To illustrate the sheer scale of this mechanism from 2020 through 2024:

• Total Income Tax Expense for the Consortium: US$5.23 billion
• Guyana’s Total Oil Income: US$6.27 billion

Rather than the consortium paying this massive sum out of its own profits, the developing nation absorbed the entire US$5.23 billion tax bill on their behalf—a staggering reality when compared to the country’s total take-home revenue for that exact same five-year period. Furthermore, the Guyana Revenue Authority issues official tax certificates to the consortium for these government-funded payments, which can potentially be used to claim Foreign Tax Credits (FTCs) in their countries of registrations such as the United States or Netherlands. While Chevron may be following the “letter” of its foreign contracts, this massive wealth transfer arguably violates the “spirit” of the ethical standards and fair corporate citizenship championed in Omaha. How would this zero-out-of-pocket tax arrangement read on the front page of the local paper?

Beyond these staggering tax disparities, this ideological clash extends to the realm of environmental liability. Berkshire’s Audit Committee Charter explicitly requires the discussion of policies governing the company’s exposure to risk, including environmental and social risks. Yet, the consortium operates in Guyana through a limited liability subsidiary, ExxonMobil Guyana Limited (EMGL), heavily shielding the parent companies (including Chevron) massive assets. Rather than doing what is right, moral, and obligatory to the rule of law in honoring its legal imperative to provide a parent company guarantee covering all costs for cleanup in case of a major oil spill, the consortium uncaringly reneged on this legal requirement with change in Guyana’s Government in 2020, and has aggressively negotiated to cap its guarantee at a mere US$2 billion. To put this in perspective, the Macondo spill in the Gulf of Mexico costed upwards of US$145 billion.

Astonishingly, the consortium has appealed the ruling while it continues to callously compromise safety, health and the environment by illegally violating several terms of the Environmental Impact Assessments (EIAs) and standard international practices, by:

1. Exceeding safe production limits enshrined in the EIAs. Significantly, the EIAs legislate the maximum safe production limits, but the consortium is recklessly, dangerously, and illegally operating way above these limits, enhancing the opportunity for an oil spill that risks financial bankruptcy and environmental catastrophe of the region, especially, when the consortium at the very same time refuses to cover the full cost of clean-up of such a spill, capping its liability to a measly US$2 billion in contrast to the Macondo spill costing US$145 billion.
2. Flaring of tens of millions of standard cubic feet of toxic produced gas per day into the atmosphere, instead of complying with the EIA which stipulates that all gas be reinjected into the reservoirs under normal operations. This atrocity compounds the negative impacts of climate change, acid rain, and respiratory illnesses. The consortium’s loathsome justification is that “Guyana is a carbon sink.”
3. Dumping of billions of barrels of toxic and radioactive produced water into the pristine ocean, instead of complying with the standard international practice of reinjecting such water into the reservoirs. The produced water is loaded with heavy metals, 2-3 times hotter than the ocean water, contains 100s of thousands of pure oil being dumped with the water, and kills millions of fish eggs per the EIA.

We welcome development of any form including oil & gas and supports the consortium’s making of large profits, providing it is done in a responsible, safe and environmentally sound manner.

Unfortunately, under the current state of affairs, the developing nation of Guyana and its neighboring Caribbean and Latin American countries are effectively left to potentially suffer financial bankruptcy and environmental catastrophe resulting from a major oil spill, while Chevron and its partners profit off of the plight of these countries.

This creates a profound paradox. While the parent holding company in Omaha proudly writes record-breaking checks to the IRS and embraces its financial obligations, a significant driver of Berkshire’s portfolio value is actively benefiting from multi-billion dollar, zero-out-of-pocket tax arrangements and legally shielded environmental liabilities financed almost entirely by a developing nation.

Given Berkshire’s longstanding commitment to intellectual honesty, how does the management team internally reconcile this philosophical disconnect? Is there a threshold where the aggressive optimization strategies of portfolio companies begin to conflict with the core values championed in Omaha?

Thank you for your time and leadership. I wish you the very best as you continue to build upon Berkshire’s incredible legacy.