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.