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Exxon admits US$7.3B audit may uncover spending in other oil blocks
May 27, 2023 News
…as 60-day comments period continues
Kaieteur News – Esso Exploration and Production Guyana Limited (EEPGL), the subsidiary of ExxonMobil Corporation recently said the ongoing US$7.3B audit of its expenses, for the period 2018 to 2020, may uncover spending to develop resources in other oil blocks operated by the company.
Vice President and Business Service Manager at ExxonMobil Guyana, Phillip Rietema
Vice President and Business Service Manager at ExxonMobil Guyana, Phillip Rietema was at the time responding to a request for an update on the audit process, during a press conference last week, when he explained that the process will entail some “back and forth” between the parties, which may conclude over the next few months.
Rietema was joined by the ExxonMobil Guyana President, Alistair Routledge during the engagement at the company’s Kingston, Georgetown office. While detailing the steps involved in the audit, the company’s Vice President said, “The audit process in its steps is gonna have some back and forth. So an audit kicks off and the auditors come and there is a meeting and we talk about a scope of work- it takes a number of months, we’ve provided a lot of information, they work through that, there’s clarifications, they then take the findings to the government here, GRA (Guyana Revenue Authority) is involved (so is the) Ministry of Natural Resources and then they have a draft report that, per the requirements, is then shared with us.”
This stage, he said allows Exxon to analyze the information and point out any concerns that may exist. This is part of the 60-days comments period, which is presently ongoing on that particular review. Presently, the company’s pre-contract costs are still being audited as well by a British firm, IHS Markit.
In the meantime, Rietema said ExxonMobil Guyana has provided its comments to the government on the US$7.3 billion audit, which will be reviewed and sent back to the company with the aim of finalization.
Rietema however noted that it is likely for auditors to find that the company may have spent resources to develop other blocks in Guyana, held by Exxon.
“We are talking, as you noted about US$7 billion, so there’s an expectation that through the audit process, there will be some areas where maybe they weren’t solely for Stabroek operations, they belonged in one of our other blocks and so we discuss that in a line,” he explained. As such, the Exxon official noted that this particular multibillion-dollar audit will continue to progress over the coming months.
So far, he reported that “I think the process has gone quite well, there’s been really good collaboration between our company, the auditors, the government. A lot of transparency, we pride ourselves on this, as I said we’re audited frequently by a number of different organizations and so this is a typical natural process and there’s always gonna be a little differences of opinion and some of those we agree with.”
Last month, it was reported that the government received the final report from the audit team. The process was conducted by VHE Consulting which is a registered partnership between Ramdihal & Haynes Inc, Eclisar Financial, and Vitality Accounting & Consultancy Inc.
The Local Consortium is supported by International firms – SGS and Martindale Consultants for the ‘Cost Recovery Audit and Validation of the Government of Guyana’s Profit Oil Share’. To this end, the audit zoomed into ExxonMobil’s expenses between the years 2018 to 2020, which have already been billed to the country. The contract was awarded by the current administration back in May 2022.
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