Ram says NRF does not reflect full amount of royalties due

election either in cash based on the value of the relevant Petroleum as calculated pursuant to Article 13 or in kind, a royalty of two percent (2%) of all Petroleum produced and sold, less the quantities of Petroleum used for fuel or transportation in Petroleum Operations, from all production licenses subject to this Agreement.”

He said that even the most diligent journalist or forensic investigator cannot compute the royalty payable to Government in the absence of the cost of petroleum used for fuel or transportation in Petroleum Operations. He said that there is no real solace in the fact that the effect on royalty is 2% of that total.

“The other problem is that we will not know the value of petroleum sold by Exxon, Hess and CNOOC until their 2023 numbers are released in the form of audited financial statements within the next couple of months. To reduce the margin of error therefore, I have used just 2022 data from the financial statements of the three companies, plus the proceeds from sale of Government share of profit oil and apply to that total, a 2% for royalty”, he said.

He added that what is apparent is that there is indeed some US$73.8m of royalties unaccounted for and “one can speculate whether this is all to do with the implausible absence of the cost of fuel used in production or transportation, or in the difference in the accounting methodology used – accrual in the case of the oil companies and cash basis in the case of the NRF. Yes, the numbers are lower than Hunte’s, but he extrapolated to the end of 2023 when production, and therefore royalty soared. His numbers ought not to be discounted or dismissed”.

Ram concluded his column by saying: “I repeat again, unless President Ali puts a Petroleum Commission in place, Guyana’s incompetence in oil and gas will continue to be exploited at the national expense”.

Dorwish had said in her letter that analysts attempted to reconcile the 2020-2022 Guyana Natural Resource Fund royalties’ balance but to their dismay, “there is a significant shortage of royalty payments in the years 2020 and 2022, 23% and 13% respectively. The Natural Resource Fund appears to be missing an approximate GY$5.6B (US$27M) in royalties, payments that Exxon and its affiliates should have made”.