ExxonM used Guyana’s Oil Profits to pay for Puppet Shows and Go-kart Rentals for Expats and Families

Nov 03, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – While the Production Sharing Agreement (PSA) governing the Stabroek Block explicitly statutes that ExxonMobil may take some of the revenues made to cover any expenditure related to oil production, a key report has found that the oil giant has been abusing its access to the nation’s oil profits.

A report prepared by a team of local and international auditors found that the company used a portion of the country’s oil profits on a number of corporate activities which are entirely unrelated to the safe pumping of oil from the Liza Phase One and Two Projects in the Stabroek Block.

In the report seen by this newspaper, auditors said Exxon used US$285,422 or $60 million on hosting social gatherings for its staff, Christmas parties and other corporate and goodwill events.

Expounding on these events, auditors said they discovered that Guyana’s oil profits were used to fund Christmas parties, dinners, gifts, bands, and decorations as well as Family Fun Day supplies for its expatriates such as catering, tents, tables, performing artists, puppet shows, engraved trophies, rental of go-karts and gifts and prizes. A portion of the funds also went towards securing Executive airport lounge access. Auditors also flagged unnecessary costs for expatriate travel.

Auditors said the foregoing have nothing to with Guyana’s oil operations as per the terms of the agreement and are therefore not cost recoverable.

“A cost must be carried out for, or in connection with, production operations for the cost to be recoverable. These costs were not directly for production operations; they were for corporate goodwill and general morale,” the auditing team said.

Furthermore, the auditors said Exxon acknowledged that these types of costs are not recoverable because in other instances, it reversed more than US$12M spent on similar activities.

The auditors said Exxon agreed to return US$ 53,686.23 in the case mentioned but denied the remaining $ 231,736.25 requested.

Exxon argued that the remainder was spent on periodic staff events, employee team building events, health awareness and seasonal awards which are typical in any organization and common practice in the international oil and gas industry in connection with the exploration and production of petroleum.

Whether a customary cost or not, auditors insisted that these corporate costs are not recoverable and further insisted that the remaining US$231,736 be returned.

The report compiled by Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting and Consultancy Inc with backing from Martindale Consultants, is yet to be released to the public. Kaieteur News had previously reported that the audit contract that was awarded to the consortium 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 and found several discrepancies 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 in the Stabroek Block.

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Christmas parties, dinners, Eclisar Financial, gifts, Ramdihal & Haynes Inc., Vitality Accounting and Consultancy Inc

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