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Exxon’s 2020 financial statements vague; not in keeping with international standards-Chris Ram
Kaieteur News – After reviewing the 2020 financial statements of ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Inc., the largest of three partners in the Stabroek Block, Chartered Accountant, Christopher Ram, said he could only describe it as vague and certainly not in keeping with International Financial Reporting Standards.
Chartered Accountant, Chris Ram
In his most recent writings, Ram first pointed out that one ought to bear in mind that Esso is the Operator of the Stabroek Block as it holds a 45 percent working interest and is therefore charged with conducting day-to-day activities. He noted however that this crucial or fundamental point was not even acknowledged by Esso in its financial statements. It was also not recognised by Esso’s other partners on the block, Hess Guyana Exploration Limited and CNOOC Petroleum Guyana, in their 2020 financial statements.
With respect to Esso’s income statement, Ram said what stands out is that not a single line item of income or expenditure carries a note to explain or expand on what they are for. He said readers are therefore left to figure out for themselves what comprises these numbers and what they mean.
Ram noted for example that as presented, no transactions are carried out with related parties, production is sold to non-Exxon companies, there is no cost for management support from Exxon and that the only related parties are Hess and CNOOC. “If that is not the case, then, again, the financial statements do not comply with International Financial Reporting Standard (IFRS),” the Chartered Accountant stated. He further noted that the income statement is so bare that the reader has no idea what constitutes Esso’s $18.3B exploration costs or the composition of its $20.8B administrative expenses, which were incurred in 2020.
Overall, Ram noted that the financial statements by the Stabroek Block partners share one troubling characteristic—to disclose as little as possible, if not to mislead.
Ram noted that he will conduct a more detailed analysis on the financial statements this week but for now, “it seems clear to me that the three entities are not in compliance with the relevant International Financial Reporting Standard (IFRS) governing such operations.”
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