British firm paid US$300,000 to audit US$460M Exxon pre-contract costs

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Director of the Energy Department Dr Mark Bynoe

Having finally secured someone to audit ExxonMobil’s cost oil claims, Energy Department Director Dr Mark Bynoe has announced that the company, IHS Markit, has already begun its work.

Bynoe made the announcement during a press conference at the Department of Energy’s new office in Brickdam, Georgetown on Monday. He explained that the contract, to the tune of over US$300,000, will be for a four-month duration.

“The contract for the firm to complete the cost recovery audit, the historical cost, was signed. The contract was awarded to IHS Markit and the company has commenced its work with an in-country visit from December 9 to 11, 2019.”

Bynoe further explained that in addition to his Department, the Guyana Geology and Mines Commission (GGMC) and the Guyana Revenue Authority (GRA) will also be collaborating with IHS Markit on the project.

“The Department of Energy and the GGMC will be working along closely with the GRA, on this project. Additionally, the Department of Energy has secured external legal expertise to assist the audit process,” Bynoe said.

“It runs for four months; the full team will be on the ground early January. They have already presented to us their work plan.

IHS Markit is the product of a 2016 merger between two companies, United States (US) based IHS and London-based Markit. Its data and information services business caters to industries such as automotive, energy, financial services, defence and maritime.

The company is no stranger to Guyana’s oil sector, having published a number of write-ups and analyses on Guyana’s efforts to develop its capacity. This includes ‘Guyana’s deepwater areas will remain competitive, despite changes to fiscal terms (IHS Markit, 2018)’ and ‘How activity in the Guyana mini basin is booming with five exciting discoveries since 2015 (IHS Markit, 2017)’.

Earlier this year, GRA Commissioner General Godfrey Statia had announced that five audit firms had been shortlisted from a pool of 14 applicants vying to conduct audits into the over US$400 million in cost oil claims submitted by oil giant Exxon Mobil to the Government.

He had referenced the World Bank US$35 million Development Policy Credit to Guyana, noting that money from this will enable the Government to procure the services of the accounting firm to do the cost oil analysis. Statia also revealed that Exxon was co-operating with the Authority.