Exxon sports Guyana’s profits on staff parties, social media ads and trips for ex-govt. officials

Exxon sports Guyana’s profits on staff parties, social media ads and trips for ex-govt. officials – Audit Report exposes

Oct 23, 2023 News

Kaieteur News – ExxonMobil Guyana Limited has been caught red handed by auditors sporting Guyana’s oil profits from the Stabroek Block on staff parties, social media ads, and trips for ex-government officials.

In the latest audit report seen by this news agency, a team that blends the expertise of local and international experts, said none of these expenses are authentically related to the conduct of petroleum operations and the Stabroek Block account should be reimbursed accordingly.

Importantly, the audit process did not sample every bill associated with the US$7.3B expenditure. Auditors only reviewed a sample of the bills. The local and international team of experts was given a four-month deadline to complete the audit.

This meticulously prepared audit, conducted by local consortium of Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with the backing of global firms SGS and Martindale Consultants, emphasizes that Exxon charged several corporate expenses to Guyana’s oil projects that are non-recoverable as per petroleum operations standards.

Auditors said some examples of the non-recoverable expenses incurred during the period 2018 to 2020 include: Facebook / Instagram advertising, travel and hotel expenses for four ex-government officials who attended the naming ceremony of the Liza Destiny vessel in Singapore, a Houston trip for Exxon officials to meet with their partners on a joint venture audit, and the payment for venues to host staff parties.

Auditors were keen to point out that Annex C of the Stabroek Block Production Sharing Agreement which deals with (Accounting Procedure) allows as chargeable costs, “all costs, expenses and expenditures relating to the petroleum operations.”

They also highlighted that “petroleum operations” in the contract means: “Prospecting Operations and/or Production Operations, as defined in the Act conducted pursuant to this Agreement and which were conducted under the 1999 Petroleum Agreement with such previous operations being hereby deemed by the Minister to be carried out under this Agreement.”

With a keen eye on contractual stipulations, auditors said any cost Exxon seeks to reclaim from the Stabroek Block revenues should be directly aligned with, or in pursuit of production operations.

Auditors said, “These costs were not directly for Stabroek production operations, they are corporate expenses (which are) not recoverable.”

Auditors therefore asked Exxon to return US$299,120 to the Stabroek Block account.

Exxon, according to the undisclosed report seen by this newspaper, only returned US$130,277 for the travel expenses cited. Auditors said Exxon is yet to explain why it did not credit the full amount as instructed.

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Accounting Procedure, Audit Report exposes, Eclisar Financial, Ramdihal & Haynes Inc.

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