US Democratic Senators seek clarification on ExxonMobil’s tax liabilities from 2016 Stabroek Block contract

Three United States (US) Democratic senators have formally requested detailed information from ExxonMobil regarding how the company’s oil operations in Guyana have affected its US federal tax liability. Senators Sheldon Whitehouse, Jeffrey Merkley, and Chris Van Hollen sent a letter to ExxonMobil CEO and Chairman Darren Woods highlighting concerns that US taxpayers may be indirectly subsidising the company’s foreign oil production.

In a letter sent to Woods dated September 23, 2025, the senators’ inquiry focuses on the 2016 Stabroek Block Petroleum Agreement (PA) between ExxonMobil and the Government of Guyana [that agreement was negotiated and signed by the APNU/AFC administration]. Under the agreement, ExxonMobil holds the right to extract nearly 11 billion barrels of oil discovered off the Guyanese coast. The agreement allows ExxonMobil to retain 75 per cent of the value of oil produced until the company recoups its recoverable costs, with the remaining 25 per cent split between the company, its partners, and the Guyanese Government.

Article 15.4 of the PA stipulates that the Government of Guyana is responsible for paying ExxonMobil’s Guyana income taxes from its share of profit oil. The senators have raised questions about whether such arrangements could allow ExxonMobil to claim US foreign tax credits (FTCs), effectively lowering the company’s US tax bill using payments made by the foreign Government.

The letter also references US tax regulations concerning “dual capacity” taxpayers, multinational corporations that pay income taxes to a foreign Government while simultaneously receiving an economic benefit, such as the right to extract oil. Current rules allow such companies to divide payments into creditable taxes and non-creditable payments, a distinction the senators argue may be exploited to reduce US tax obligations.
Senators Whitehouse, Merkley, and Van Hollen requested that ExxonMobil provide answers to a series of detailed questions by October 23, 2025, including the nature of income tax payments made on behalf of the company, whether US FTCs were claimed, and how the company calculates creditable taxes. The senators also sought clarification on ExxonMobil’s partnership with the China National Offshore Oil Corporation (CNOOC) and how such arrangements affect US federal taxes.
The inquiry comes amid broader scrutiny of multinational energy companies and their tax practices, particularly in relation to Government subsidies and foreign partnerships. The senators note that closing potential loopholes could save US taxpayers billions of dollars over the next decade.