While the first audit of ExxonMobil Guyana Limited’s expenses has proven to be a long and tedious process, local authorities will not consider any settlement talks to merely get the process over with. This was confirmed by Vice President, Dr. Bharrat Jagdeo during a press conference on Thursday. The official said his position is that any talks of settlement, at this point, would not be to the country’s benefit, especially if one considers that Exxon is pushing to reduce US$214M in disputed sums to US$3M.
That US$214M in questionable spending was first flagged by British firm, IHS Markit. The company was contracted back in 2019 to conduct the audit of Exxon’s expenses totalling US$1.7B. Those costs were sunk from 1999 to 2017.
The audit process subsequently became embroiled in controversy after the Ministry of Natural Resources’ Petroleum Unit engaged in unauthorized negotiations with Exxon, where documentation was accepted to substantiate more than 90 percent of the sums. When this development was leaked to the media, civil society actors and the political opposition condemned it, saying that it weakens the position of the country.
The ministry was then instructed to conduct a probe through which it learnt that the Unit acted in defiance of advice it received from the government’s advisor on the matter, the Guyana Revenue Authority, to close the audit at US$214M in disputed costs.
Earlier this week, Exxon’s Country Manager, Alistair Routledge said he was of the opinion that his company was engaging the right technical people at the ministry’s unit, while expressing regret at the fact that the unit’s Senior Petroleum Coordinator, Goopnauth Bobby Gossai would have to face disciplinary action for the unauthorized reduction of the costs.
Vice President Jagdeo made it clear yesterday that his government is not interested in seeing the additional documentation Exxon has unearthed after the closure the audit. He said too any further talks on settlement or further review of Exxon’s documents after the advice of GRA would be unwise.
“I don’t believe there is scope at this stage for settlement especially given the magnitude of reduction Exxon is talking about moving from US$214 to US$3 and if we settle with that then its only half of that we get and so those figures are not palatable at all. So we may have to go to arbitration,” the Vice President said.
According to the Production Sharing Agreement (PSA) governing the Stabroek Block, Guyana Standard understands that the seat of arbitration shall be in Washington DC. However, hearings may be held at such other places as the parties agree.
The contract also states that Guyana would have to stand the cost of arbitration as well as Exxon’s legal fees. Jagdeo said government has not examined the cost as yet but stressed that a third party is most certainly needed to settle the matter once and for all.
