Dear Editor,

In his haste to prove a point, that the Vice President, Dr. Bharrat Jagdeo was wrong on the ExxonMobil Guyana (EMG) asset valuation, Lalbachan Chris Ram’s analysis was fraught with a myriad of elementary errors (reference to Kaieteur News article captioned: “Ram exposed Jagdeo’s misleading value of Exxon’s asset and Chris Ram’s Stabroek News column dated March 1, 2023, with the caption: “Mr. Jagdeo cannot perform as an oil minister).

Ram’s Error #1.0

Christopher Ram contends that EMG’s total assets of US$20 billion as stated by the Vice President is incorrect. To prove his point, Ram argued that as of the end of financial year 2023, EMG’s net assets stood at US$7 billion. Now, there are two errors in this statement. In fact, one is an error, and the other is a falsehood.

Ram’s Error # 1.1

Firstly, there is a huge distinction between net assets and total assets. Net assets is the difference between total assets and total liabilities. So, not the same. The Vice President was referring to the total assets as of the end of 2022, not 2023 because the 2023 financials have not been filed as yet.

Ram’s Error # 1.2

Secondly, it must be noted that when the Vice President or anyone for that matter, refers to Exxon’s total assets, it is understood to mean the total assets for the Stabroek block operations, which include the co-ventures (CoVs), Hess and CNOOC. This is in accordance with the 2016 Petroleum Agreement that currently governs the Stabroek block as there is no other operator in the Stabroek block at this time. In other words, EMG is the operator for all of the total assets in the Stabroek block.

Ram’s Error # 1.3

Thirdly, Lalbachan Ram was being totally dishonest to suggest that he is in possession of the 2023 financials. The 2023 financial statements are expected to be filed by April 2024. To substantiate Ram’s dishonesty coupled with his elementary error thereof, the US$7 billion figure he came up with is the net asset figure based on EMG’s financials for 2022, not 2023. He deliberately excluded the total assets, which would have been derived from the sum total of EMG, Hess and CNOOC total assets, knowing full well that EMG is the operator in the Stabroek block. Another elementary error on Ram’s part, just to prove a point, which in fact shows how wrong he (Ram) was and not the Vice President.

Ram’s Error # 2

Ram then contends that the Vice President’s reference to the Chevron/Hess deal as a merger is wrong. Here, Ram exposed how divorced he is from the contemporary literature in corporate finance, and he is operating in an outdated world of finance. In the contemporary corporate finance world, the differentiation between a merger and an acquisition is eroding. It is now referred to as “M&A” transactions (mergers and acquisitions). There is no separation anymore. So, the deal between Chevron and Hess is an M&A deal. As such, whether it is referred to as a merger or an acquisition, neither is incorrect. Ram, in his haste to prove a point, ignored the context altogether, coupled with his unfamiliarity with the contemporary literature. But, as demonstrated herein, it’s a trivial matter.

Ram’s Error # 3

The Vice President, in responding to the question posed to him by the Kaieteur News reporter, to which Ram refers, said that the deal is US$60 billion. Ram hasten to point out that the Vice President was wrong. But again, it is Ram who was evidently being petty for the third time as already noted above. The deal is actually reported as US$53 billion, however, in the context of the answer the Vice President provided, he was not incorrect. His (the VP) response was understood to mean that the deal is in the region of US$60 billion. Especially, now since ExxonMobil is trying to block Chevron from proceeding, this can amount to a counterbid from ExxonMobil or Chevron, well in the region of US$60 billion or higher.


Finally, the Vice President was correct when he said the total assets of EMG, including Hess and CNOOC stood at US$20 billion, as of the end of 2022. In Lalbachan Ram’s persistent haste inspired by triviality and vexatiousness, he has on numerous occasions exhibited his ineptness, incompetence, and mediocrity in his so-called analysis..

Yours respectfully,
Joel Bhagwandin


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