Vice President Dr. Bharrat Jagdeo on Tuesday addressed recent misconceptions about the audit report on ExxonMobil’s US$1.6B expenses incurred in the Stabroek Block from 1999 to 2017.
As he delivered his keynote speech at yesterday’s inaugural Local Content Summit, he asserted that the government is reviewing all contested cost oil claims made by the company and denied claims that the audit report prepared by IHS Markit has been withheld.
While addressing “misleading” statements that the 2019 audit report conducted by IHS Markit has been with the government for some time, he said, “I saw a report a couple of days ago that the audit that was done by IHS Markit has been with us for a while. And somehow, because it identified over US$200 million of areas that we didn’t agree with, that the Government of Guyana or somehow the political directorate kept the report hidden.
“Now that report has been with the staff of the Ministry and with the GRA and all their technical people, for the last several years. Nobody’s hiding the report. In fact, we tried to localise that. That was the first audit done by IHS Markit.”
In 2019, the former coalition government contracted IHS Markit, a British firm, to conduct the first audit of the bills Exxon racked up through its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL). That auditing contract costs US$300,000.
Jagdeo confirmed that if the expenses cannot be justified, they will not be approved. He stated, “If they can’t submit additional documentation, then the cost is disallowed. So, it comes out of the cost bank and goes towards profit oil. So, a greater share (would be available to us)…the adjustments would have to be made to profit oil.”
The Vice President also revealed that the government has hired the necessary technical expertise to review these cost oil claims, but pointed out that due to the back-and-forth nature of these matters, a timeline for completing the audit and review process cannot be given.
Moreover, he dismissed claims that the government is delaying the second audit of Exxon’s bills, stating that it was only delayed to include more local participation. He said, “We delayed the second audit because we wanted local people to participate in the audit. We worked to put together a consortium of four Guyanese companies…because we wanted local content in the audit. It’s not a cover-up.”
The local consortium consisting of four Guyanese companies namely, Ramdihal and Haynes Chartered Accounting and Professional Services Firm, Vitality Accounting and Consultancy Inc., and Eclisar Financial & Professional Services, were hired last year to conduct the second audit of the oil giant’s expenses. They partnered with Oklahoma-based company Martindale Consultants Inc. and Swiss technical company SGS to complete the audit.
That exercise involves the examination of US$7.3B in expenses.
