S7.E9 | Did Guyana make a Bad Deal with ExxonMobil?

We analyzed the deal Guyana made with ExxonMobil to show that a profit sharing deal is better than royalty only and that the deal Guyana made for 2% royalty and 50% profit is equivalent to 14.25% royalty only. This is better than the deal Suriname made for 6.25% royalty and 36% income tax. Using ExxonMobil’s profit margins for the past 12 years the expected profit is 5% so a royalty only deal may have been half profit 2.5% + 2% = 4.5%. This is worse that our current deal. Hence We got the best deal under this circumstances.