Exxon says has responded to draft audit report, awaits word from Guyana gov’t

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Following a recent controversy surrounding an audit of Exxon’s expenses, ExxonMobil Guyana has issued a statement affirming its cooperation with the process. The company noted that it has provided the required responses and documents to address the points highlighted in the draft audit report from the government. 

“We now await a formal response from the Government, after which we will enter into further dialogue as necessary,” Exxon stated. 

The company stated that auditing processes are not uncommon in the oil and gas industry. It stated, “Auditing an oil and gas joint venture operator’s expenses is a standard process by co-venturers and governments to ensure only appropriate costs are charged. It’s normal for auditors to highlight focus areas by sharing a draft report that is later addressed with additional documentation.” Such audits, the company said, usually result in few, if any, costs being dismissed, signaling the robustness of its accounting activities.

The Guyana government has rights under Article 23 and Annex C of the Stabroek Petroleum Agreement to conduct these audits. ExxonMobil, in its statement, reinforced its commitment to cooperating with the government and its appointed consultants, emphasizing that it acted in good faith throughout the cost recovery audit for the years 1999-2017.

The Guyana Revenue Authority (GRA), entrusted with managing an audit of Exxon’s expenses, had concurred with the findings of IHS Markit, the firm hired to audit Exxon’s claimed 1999-2017 expenses. Specifically, out of US$1.7 billion in Stabroek Block expenses, IHS Markit and GRA determined that US$214 million were disputed.

This situation escalated when the Ministry’s Petroleum Unit controversially reduced the disputed amount to US$11 million, after having direct talks with Exxon, a move that was later revealed and criticised by the government. The Ministry acknowledged it made an “unauthorised examination of documents submitted by Exxon.” 

Vice President Jagdeo has consistently emphasized the importance of transparency and has assured the public that all aspects of this matter will be addressed once the Cabinet of Ministers receives a detailed report on a government probe of what went wrong. He also underscored that if the disputed amount remains at US$214 million, the government would stand with GRA, and have the matter resolved through arbitration.

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