ExxonMobil’s expenses

Jan 06, 2023 Editorial

Kaieteur News – It is a huge chunk of money, by any calculation. Pursuant to the 2016 Production Sharing Agreement, ExxonMobil’s expenses are taken out from the first 75% of Guyana’s oil revenues. Considering the amounts that Guyana has ended up with as its share of the split of the remaining 25% of oil revenues, then a clearer picture should emerge of the many billions in expenses that are absorbed by that 75% from the top after royalties.

In those billions in expenses, there is a tremendous amount of room for expense manipulation, expense creation, expense exploitation. Even in a best-case scenario, where ExxonMobil possessed of an outstanding reputation as a trusted corporate partner, Guyana still needs to be vigilant and on top of things. Said differently, Guyana has to have its framework of expense review, position itself to do its homework through ongoing scrutiny, and get better and better at performing expense due diligence.

From every indication, the PPPC Government is having none of that, would not listen, does not give a hang. The Government’s mantra is best summed up in these words to ExxonMobil: you spend, we bend. The PPPC Government does not care if ExxonMobil gouges Guyana, rips-off Guyana, or bleed Guyana dry through savaging expense accounting in the bills it submits for approval. Let us be straight about something: any company, not just ExxonMobil, that does business with Guyana, or for Guyana, must be paid, but on one condition. We must be satisfied that what has been presented to us as expenses has been subjected to the most intense review/audit that we are capable of. That is, check and verify, crosscheck and doublecheck and verify within reasonable limits.

We are a poor country that has now discovered oil, and every billion in expense is a billion less as part of the accounting that concludes with that magical profit number. We cannot afford to be casual or negligent in this area, or to rely on what ExxonMobil submits to us for approval. This is basic commonsense, and not representative of any sophisticated audit scheme. Our oil dollars matter to us, and we must watch everyone of them like hawks protecting their nests and young. This much is owed by the Government to the Guyanese people; at the barest minimum, do the due diligence thoroughly.

We are aware that an audit report for US$7.3B in expenses is overdue, being awaited. It was first due by the end of September last, but which date was expanded to go into December. December has come and gone, and the days are increasing as January moves forward. This alone conveys that there are developments with the audit that give pause, causing some concern, if not bottlenecks and pushback somewhere in the mix. We are not going to read anything into the repeated delays, other than to say that we may be getting (perhaps) some value for our audit dollar. Or that whatever preliminary report (if any) that was delivered by the audit team in December, it is causing somebody in the PPPC Government or ExxonMobil, or both, some nervousness, if not a full migraine. Naturally, this is looking to what could be helpful to Guyana’s interests.

While we wait on the audit report, be it later in January or beyond, and with the understanding that it will be given full public ventilation, a recommendation was made that we believe can only help, be constructive. ‘Submit Exxon’s quarterly expenses to Parliament for scrutiny…while nation awaits delayed audit report – Opposition tells Govt.’ (KN January 5). Again, this is pure commonsense, as it gives Guyana a clearer understanding than we have now for ExxonMobil’s expenses. In this manner, we are ahead of the clock by the time the formal annual audit(s) are scheduled to start. Surely, the Government cannot have a problem with a recommendation like this, and we look forward to seeing how it will react.

Further, if ExxonMobil wishes for Guyanese to view it as an open and trusted partner, then this is its opportunity to manifest how genuine it is. ExxonMobil should not resist providing its quarterly bills, which would be a good faith gesture. Now, let us all watch to see what follows.