Exxon used Guyana oil profits on Christmas cook-out, Zumba & Yoga classes for expats

Oct 26, 2023 ExxonMobil, News, Oil & Gas

Audit of Liza 1&2 US$7B Bills reveals…

Kaieteur News – ExxonMobil Guyana Limited has been caught red-handed by auditors using profits from the Stabroek Block Projects to cover a number of ridiculous expenses which have nothing to do with the production of oil.

According to the report seen by this newspaper, Exxon used US$ 136,003.62 to cover costs associated with sponsorships, fitness classes, promotional items, and other similar activities. Auditors said in no uncertain terms that such costs are not recoverable. They even quoted the Stabroek Block Production Sharing Agreement (PSA) which states that only those costs, expenses and expenditures relating to the petroleum operations can be recovered from the Stabroek Block account.

Clarifying further, auditors said a cost must be carried out for, or in connection with, production operations for the cost to be recoverable. Auditors said Exxon’s removal of US$136,003 from the Stabroek Block account to cover Yoga and Zumba fitness classes for its expatriates, a Christmas potluck luncheon, the hosting visit for a Shell Beach Outreach Programme including catering and boat and ground transportation; Exxon branded duffel bags, coolers, and lanyards for a Contractor Safety Workshop; Meals, beverages, tents, chairs, and facilities for “Culture of Health” 5K run/walk and other similar events leave it in breach of the contract.

Auditors said, “these costs were not directly for production operations; they were for corporate goodwill and are thus not recoverable.” Auditors said Exxon acknowledged that the costs are not recoverable and agreed to issue a US$24,636 credit to the Stabroek Block account. Exxon however refused auditors’ request for the remaining US$111,367 to be credited to the account.

It should be noted that this audit report prepared by Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with backing from Martindale Consultants covers Exxon’s expenses totalling Exxon’s US$7.3B expenses and incurred from 2018 to 2020. The report is yet to be released to the public.

Another critical point of note is that this audit did not entail a review of every bill related to the 2018 to 2020 period as it was not a forensic audit. In fact, leader of the local consortium involved in the audit, Floyd Haynes, confirmed this with Kaieteur News in a previous interview.

He had further explained that the audit would not examine every single cost incurred by Exxon. He said no audit is ever done that way. Haynes said auditors look at a sample of the costs incurred. He had said that sample is based on a number of things.

Kaieteur News had previously reported that the audit contract that was awarded to Haynes and his team back in 2022 for US$751,000 had a strict four-month deadline for completion. Notably, the US$7.3B costs which the auditors examined pertain to the investments for the Liza Phase One and Liza Phase Two Projects which are currently producing approximately 400,000 barrels of oil per day.