Exxon wiped electronic accounting system of all data on Guyana expenses between 1999 and 2004

Apr 12, 2023 News

…only limited hard copies provided to auditors – Report

Kaieteur News – ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) has informed a team of auditors representing the interest of the State that it would not be able to present all of its financial data/statements covering the period 1999 to 2004. The affiliate explained that the main reason for this dilemma is that its accounting system was purged during that time, in an effort to accommodate a switch to its parent company’s accounting system.

The foregoing was outlined in a March, 2021 report that was produced by British firm, IHS Markit.

According to the report seen by Kaieteur News, IHS said the accounting / finance systems deployed by EEPGL have evolved over the years as the complexity of the operations has grown. It said, between 1999 and 2016 EEPGL utilized a standalone version of P2 Energy Solution’s IDEAS Oil and Gas accounting software – a common tool used for new exploration areas, thereby offering rapid deployment.

As of 2017, the auditor said EEPGL migrated over to the ExxonMobil worldwide corporate which runs on IPES an SAP based accounting and financial management platform. IHS explained that this platform is used worldwide for all ExxonMobil operated assets and offers additional sophistication as required for development and production assets.

The auditor’s report said, “Therefore, during the period being audited, the costs have been spread across two different systems. EEPGL confirmed that data prior to 2004 is not available in IDEAS as it has been purged in accordance to their internal data retention policies, and data they held manually was requested and limited data received).”

During the audit review, IHS said 142 active accounts were identified in the IDEAS system and 140 accounts within the IPES system. As of the second quarter of 2017, the auditor said approximately 90% of the total cost being claimed for recovery are recorded within the 30 largest accounts.

“Therefore, in order to validate costs have been kept in accordance with the terms of the 2016 PSA – the audit team focused on reviewing the details of individual transactions and mapping each active account within the IDEAS and IPES system to the appropriate provision within the PSA’s accounting procedure,” the report stated.

If after review of the account description and specific transactions, uncertainty remains regarding the nature of transactions being claimed for recovery and their PSA classification, IHS said justifications were sought from EEPGL. Where satisfactory evidence was or cannot be provided to support the recovery of the transactions and accounts in question, IHS said such amounts have been flagged are considered non-recoverable until satisfactory evidence is furnished.

The foregoing audit entails the scrutiny of US$1.6B in expenses racked up during the period 1999 to 2017 by Exxon’s subsidiary and its joint venture partners, Hess Corporation and CNOOC Petroleum Guyana Limited. The report suggests that there are some US$214M in questionable costs that could be reasonably contested by the Guyana Government. Authorities are now at the stage of awaiting feedback from ExxonMobil regarding the contested claims.

British firm, energy, Esso Exploration and Production Guyana Limited (EEPGL), IHS Markit, subsidiary

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Exxon wiped electronic accounting system of all data on Guyana expenses between 1999 and 2004

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