Ring-fencing precedent set, but something looks fishy — Dr. Vincent Adams — Opinion

Ring-fencing precedent set, but something looks fishy

September 7, 2026·5 min read

Dear Editor,

There has been an array of public missives about the welcomed oil profit share to Guyana being more than tripled to 39.8%, or approximately G$8 Billion (B) per day at the current production rate and oil price. However, what seems to be missed is that this is unadulterated ring-fencing, proving that contrary to the Government’s falsity, the contract does not disallow ring-fencing, as yours truly stressed in letter “Nothing in oil contract bars ring-fencing” published in the broad media including Kaieteur News (KN) June 14, 2025 edition.

That was the good news, but something fishy seems to be going on here with lots of questions, signaling that the 39.8% is most likely short-lived as evident by the fact that the numbers do not add up; and by HE President Ali’s head spinning convoluted press conference.

There should be no doubts whatsoever that Exxon notified President Ali of the increase before it made the news, and it goes without saying that any Leader would be jumping up and down shouting from the rooftops grabbing credit and scoring political points for such good news. However, beyond belief, it had to take weeks of public pressure to force Dr. Ali into doing the normal; and when he did, his uneasiness was most noticeable, when, instead of a gleeful announcement, he inexplicably first went on the defensive, taking great pains to lecture us on how the profit share formula works, and being emphatic that the contract was not changed to bring about the increase. Why this uncalled-for defensive posture?

Ali’s strange behaviour begs the question: was this just a shrewd business move by Exxon to boost its stock price and financial leverage which caught Ali by surprise, embarrassing and throwing him under the bus, since his Government has been berating and making enemies of all and sundry who dare to advocate ring-fencing and/or renegotiations? Ask Glen Lall who made fierce fighting for ring-fencing and renegotiations his daily ritual to the nation.

The ring-fencing and renegotiation question:

Most revealing was Dr. Ali’s disorienting answer to a question from Davina Bagot of KN about whether he will take this opportunity to renegotiate the contract to ensure the profit share remains at 39.8%.^[1] Amazingly not prepared for such an expectedly inevitable question, Ali resorted to confusingly speaking from both sides of his mouth that he is having “internal discussions” and seeking expert advice how to “get greater benefits” while at the same time spouting his old song and dance of “sanctity of contract”.

First, despite what VP Jagdeo believes, Guyanese are not stupid, and know fully well that Exxon is the Government’s only advisor and controller, so the “discussions” start and end how Exxon wants it. Second, how could the President still not comprehend that “greater benefits” beyond ring-fencing can only come with renegotiations which he and his Government pledge not to do? Third, this is the same Ali and oil czar Jagdeo, who vow to never renegotiate because of “contract sanctity” and are cowardly to even raise it with Exxon, though allowed for in Article 32 of the contract; and despite their manifesto promise and their rabid admonition that it is the worst contract ever, so, renegotiation will be of highest priority when in office.

The President now finds himself in a bind knowing that this increase is temporary and would be a hard sell to the people; thus, to soften the blow of this bad news, he slickly comes up with fancy talk about “discussions with experts” for “path forward to get greater benefits”. Notwithstanding Exxon being his only expert and advisor, the President is still advised that there is nothing more to discuss nor think about, since the precedent for ring-fencing has now been set, whether or not motivated by Exxon’s financial interests, and must stay in place. Any drawing of a line at the end of any project is the definition of ring-fencing; so, there can be no going back!

Moreso, the President must demand that this new dispensation be retroactively dated back to the first ring-fencing point in 2022 when the first project (Liza 1) was truly paid off, along with recovery of the 39.8% worth of USD $B owed to the country since that time.

Costs do not add up

Ring fencing means each project having its own independent cost bank (all monies charged to that project) and no use of revenues from any project to offset costs in another project. Despite the contract not barring ring-fencing, the Government gives Exxon a free rein to mix-up all of the revenues and spending into one bucket or “cost bank” being filled with the daily running costs from every project including the USD $55 B costs announced on July 31, 2026, to have been paid off for the 1st 7 projects^[2]; but most conspicuously suspicious is that there is no mention that the paid off cost bank also includes all costs running into USD $B for drilling exploration and appraisal wells and other costs for projects 8 & 9 already submitted to the Government early this year for approval.^[3]

It takes years of drilling exploration and appraisal wells and other activities such as preparing Environmental Impact Assessments (EIAs) before applying for Government approvals. For example, the Liza 1 was discovered in 2015, but it took years of drilling before discovery and over one year afterwards to apply for permits. Similarly, since applications for permits for projects 8 & 9 were submitted early in 2026, there had to have been many US$B charged to the cost bank at least starting in 2025 and before for those two projects.

The quandary facing the President and maybe why he has been so bashful, is that if there is no ring-fencing, how could there be a claim that the cost bank of US $55 B was paid off for only the 1st 7 projects, when projects 8 & 9 have been also charging their costs to this same cost bank. The Government must explain how is this possible, and come clean with what are the costs left in the cost bank for projects 8 & 9, other projects in the works, and the cumulative costs carried over every month above the 75% cost oil.

It gets more confusing when the President and Minister Bharrat acclaim that the cost bank includes expenses for both capital (Capex) and operating (Opex) equivalent to the 75% cost oil; but something else kept quiet is that the 75% cost oil is not the maximum deducted recoverable costs, for all costs above the 75% are carried over into the next month, month after month, into the cost bank.

In any case, if the Opex is 20 barrels oil out of each 100 barrels according to the President, it means that the Capex accounts for the other 55 or 73.3% of the 75 barrels of cost oil or cost bank. Thence, the USD $55 B supposedly paid off for the 1st 7 projects will have been proportionally divided into USD $40 B for Capex and $20 B for Opex. However, the Field Development Plans (FDPs) which are the heart of the projects, document a total estimated Capex of USD $61 B. With Exxon’s project management expertise, it is hard to swallow that their estimated Capex could be a whopping 52% higher than the actual costs, unless the Guyana Government happens to be managing their projects. This looks like something fishy going on here with the people’s money that must be explained.

Best regards,
Dr. Vincent Adams

References

Improving lives of Guyanese does not include renegotiation of Exxon contract – Pres. Ali — kaieteurnewsonline.com ↩
ExxonMobil confirms US$55B investment in Guyana recovered - Kaieteur News — kaieteurnewsonline.com ↩
ExxonMobil seeking approval for 8th and 9th oil projects — kaieteurnewsonline.com ↩

Nothing in oil contracts bars ring-fencing; PPP/C created all lop-sided contract terms - Kaieteur News

kaieteurnewsonline.com · 2025-06-14

Nothing in oil contracts bars ring-fencing; PPP/C created all lop-sided contract terms - Kaieteur News ## Nothing in oil contracts bars ring-fencing; PPP/C created all lop-sided contract terms Jun 14, 2025 Letters Dear Editor, ... Kaieteur News – It is sickening to look and listen to a daily diet of the PPP/C’s blatant falsehoods suggesting that the terms in the lop-sided oil contracts were created by the APNU/AFC Coalition – a lie perpetrated to cover-up the PPP/C’s spinelessness in not seeking contract renegotiations to make a better deal with Exxon for a fair and just share of our people’s own patrimony. The irrefutable facts presented herein will expose that the PPPC created all of the lop-sided terms for which they now hypocritically vilify the Coalition. ... Fact #1 – To date, there is a total of nine deep-water oil contracts. the PPP/C signed the first seven between 1999 and 2015, followed by the Coalition’s signing of the final two in 2016. ... Fact #2 – The PPP/C created every single one of the lop-sided terms which they put into their original seven contracts and afterwards copied into the two contracts signed by the Coalition, with the only change being to double the PPP/C’s 1% royalty to 2%; but that fact didn’t stop VP Jagdeo from barefacedly lying that the Coalition “gave up a zero royalty”. ... Fact #4 – Notwithstanding the above facts that all contract terms were created by the PPPC, Jagdeo dishonestly imputes the Coalition for “no taxes and no ring fencing”. First, there is absolutely nothing in the contracts stopping the PPP/C from imposing Ring Fencing; but they spread this lie to cloak their unpatriotic subservience to Exxon not wanting Ring Fencing, consequently robbing the nation of our patrimony desperately needed to bring us out of dire poverty, while putting it into Exxon’s pockets. Second, as already established, the “no taxes” term was created by the PPP/C and not the Coalition. ... Despite the above facts that all terms were created by the PPP/C ... AG Nandlall in his characteristic devious way, describes ... 016 ... as “the most ... and the Coalition ... ’t explain sensibly ... Since the Coalition ... s 2016 contract is ... only change being the Coalition ... s doubling the royalty from 1% to ... own standard, Nand ... entered into the ... us in the first place” ... waging war in ... by Janet J ... had only entailed the exploration phase, and so, excluded the lop-sided production sharing terms which were only first introduced by the Coalition in ... separate 2016 production phase contract. On the contrary, there are no separate Contracts for exploration and production. All nine contracts incorporate both the exploration and production phases and the lop-sided ... Unless exceedingly daft ... how could anyone read any of these Contracts and comprehend otherwise ... Clearly evident from all of the foregoing, these fellas, inspired by their Putinesque maxim, want Guyanese to doubt what they hear with their own ears, see with their own eyes, read with their own lips, and think with their own brains, leading to Jagdeo’s insulting utterances that Guyanese are “stupid”. He denies meaning what he said in plain vanilla talk that “They sold us out to the foreigners. Every time there is a find out there, our people should be sad because nothing comes our way. We are going to renegotiate those contracts. They gave up zero royalty, no taxes, no ring-fencing”. ... Though he relishes abusing his own citizens, reporters, and all who dare to fact check him, Jagdeo’s bloviating quickly turned into meek obedience to ... , mousily changing his tune to “sanctity of contract” fearing to even ask Exxon to renegotiate the contracts, leaving no doubt whatsoever as to who really “sold us out to foreigners” and who are the real “crooks and culprits”.

Source

Ring-fencing precedent set, but something looks fishy in Kiskadee Watch, September 7, 2026

ExxonMobil confirms US$55B investment in Guyana recovered - Kaieteur News

kaieteurnewsonline.com · 2026-08-07

(Kaieteur News) – ExxonMobil has recovered all of its investments made in Guyana to date, a development that now entitles the country to benefit from 50% or half of the oil being produced in the Stabroek Block. ... The revelation was made by the Chief Executive Officer (CEO) and Chairman of Exxon, Darren Woods during the company’s July 31, 2026 earnings call for the second quarter. ... Senior Vice President and Chief Financial Officer of Exxon, Neil Hansen offered clarity, “…as we mentioned, at this point, we’ve fully recovered the $55 billion of investment, along with all the operating costs and the way the contractor agreement works is we can recover that investment up to 75%. After that, the remaining production is shared 50/50 between us and the government of Guyana.” ... ExxonMobil discovered oil in commercial quantities in Guyana’s Stabroek Block in 2015. The company later began producing oil in December 2019. To date, seven oil projects have been approved, with ExxonMobil eyeing two additional developments. In accordance with the 2016 Production Sharing Agreement (PSA), the contractor is allowed to deduct 75% of the oil produced monthly to recover its investments. The remaining 25% is then split with Guyana as profits, meaning the country collects 12.5% of profits. After Exxon recovers its investment, the country will be entitled to 50% of the oil produced, after the operator takes out operating expenses. ... In March this year, President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge said the country was on track to clear all expenses related to the seven approved projects by the end of 2026. President of ExxonMobil Guyana Limited, Alistair Routledge ... At that time, he told reporters approximately US$5B was still to be recovered. ... Subsequently, in June, Kaieteur News reported based on an in-house analysis that Guyana has paid off ExxonMobil the full cost of seven oil projects approved to date by government. ... According to the oil deal, 75% of revenue is dedicated to cost, as such, it could be estimated that US$9.2B went towards cost, far more than the US$5B that needed to be recovered according to Exxon. ... This means that Guyana should already be receiving its full 50% profits outlined in the PSA as the cost of all seven oil projects sanctioned by the GoG has been repaid. ... Notably, the major development in Guyana’s petroleum sector was announced by Exxon to its shareholders while government has not said a word to the nation regarding the increased revenue flow into the Natural Resource Fund (NRF) as a result of the cost bank now being empty. ... government must explain how future projects will ... paid for when oil production starts at that development ... that Exxon itself revealed that the country will clear all costs for the seven projects by 2026 yet government has been silent.

ExxonMobil seeking approval for 8th and 9th oil projects

kaieteurnewsonline.com · 2026-03-20

Kaieteur News – ExxonMobil Guyana Limited (EMGL) is accelerating the pace of project development in Guyana. With seven projects currently under its belt, the company is aggressively pursuing licencing for its eighth and ninth projects in the Stabroek Block. ... On Thursday, Country Manager Alistair Routledge revealed that Exxon is expected to submit a Field Development Plan (FDP) for the eighth project, Longtail before the end of this week to the Ministry of Natural Resources. ... To this end, he announced that the first of the engagement session will take place in Mabaruma, Region One on April 13 with another session planned for April 28 at Umana Yana, in Georgetown. As such he said, “At that point we will have both the environmental permitting process coming close towards the end of its process and the Field Development Plan and application for the production licence advancing with the Ministry Of Natural Resources and GGMC.” ... Meanwhile, Exxon is simultaneously building a ninth project which aims to develop the gas resources in the Haimara discovery. He explained, “For those of you who were at the energy conference back in February, we began to talk about what could potentially be project number nine which will be anchored on the Haimara discovery in the south east part of the Stabroek Block.” ... . “We are ... To this end, the Country Manager expects a FDP to be produced for the project and submitted to government in another 12 months. The company plans to submit an application for environmental authorisation to the EPA in the coming weeks. ... Currently, four of the seven sanctioned projects are producing oil offshore Guyana. Routledge said Exxon had a “strong start” to 2026 with an impressive daily production recorded in January of 916,ooo barrels per day (bpd). ... The other projects under development are likely to be delivered ahead of schedule with the fifth Floating Production Storage and Offloading vessel (FPSO), Errea Wittu under construction in Singapore almost complete. “All of the modules have been lifted on to the topsides and now this whole operation to integrate the pipework and the wiring and to ensure that everything work together is ongoing. We anticipate that later this year the FPSO will sail to Guyana and before the end of the year we expect Uaru to startup and that will be consistent with the previous projects, all ahead of the original budget schedule and indeed ahead on budget too,” Routledge explained. The sixth FPSO, Jaguar, also under construction in Singapore is making good progress and is expected to arrive next year for startup of production before the end of the year. A seventh project, Hammerhead, approved in September 2025 will come on stream by 2029.