Govt eyeing completion of 1999-2023 cost oil audits by year-end

Vice President Dr Bharrat Jagdeo

The People’s Progressive Party/Civic (PPP/C) Government is optimistic of concluding, by this year-end, the three cost oil audits spanning the years 1999 to 2023, bringing all audits of ExxonMobil’s cost oil expenses to a current status.

The audits in question are 1999-2017, 2018-2020 and 2021 to 2023.

In a recent press conference, Vice President Bharrat Jagdeo provided an update on the latest audit, for which a Request for Proposal (RFP) for consultants recently went out. He said, “Requests for Proposal went out, and I think they have one month to submit the request. So, I anticipate by mid-year we will sign the agreement. And if they have four to six months for the conclusion of the audit, we’re going to the end of the year. Hopefully, by that time, we would have resolved the differences between the first audit and the second one.”

He added, “We would have had a strong position from GRA, so when the next audit comes in, hopefully within the GRA, which acts as our advisor, they would be able to act faster on it. But the audits would have been completed and current.”

Further, the Vice President noted that the US$214 million that was initially flagged in 2019 by British firm IHS Markit when it did an audit of ExxonMobil’s cost oil expenses racked up between 1999 and 2017 will not budge.

“The discussions are still ongoing. The position now is, we’ve made it clear. We’re not going to have a negotiated settlement any longer. We’re not accepting any lower figures. We have to arbitrate this matter on the first audit. The second one, they’re examining all the details. GRA has all the details. So, they still have to examine the findings of the auditors. So that’s what’s happening there. And then the third one, we’re going out to tender to do the audit,” Jagdeo said.

In 2019, British firm IHS Markit conducted an audit of ExxonMobil’s cost oil expenses racked up between 1999 and 2017 from its operations in Guyana and flagged US$214.4 million as questionable costs. Following months of its own review, the Guyana Revenue Authority (GRA) – the technical body tasked with advising the Government on the audited oil expenses – supported the US$214.4 million disputed sum.

The audit of cost oil claims is critical to ensuring that Guyana does not lose out on millions in oil revenues. ExxonMobil’s pre-contract costs were inherited by the current Government when it entered office in 2020. US$460 million in pre-contract costs were already written into the 2016 Production Sharing Agreement (PSA).