How ExxonMobil brazenly abused Guyana’s oil profits

Nov 12, 2023 ExxonMobil, News, Oil & Gas

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Introduction

Kaieteur News – Over the last three weeks, Kaieteur News produced several articles which highlighted the findings of an audit into US$7.3B that was expended by ExxonMobil Guyana Limited in the Stabroek Block for the period 2018 to 2020. The compilation below presents a synopsis of those stories which were carried.

1. Audit Report reveals ExxonMobil’s barefaced use of Stabroek Block revenues to cover expenses in Kaieteur and Canje Blocks

The second audit report on ExxonMobil Guyana Limited’s expenses has found that during the period 2018 to 2020, the oil giant engaged in a brazen use of revenues from oil-producing projects in the Stabroek Block to cover expenses related to two other blocks—Kaieteur and Canje.

In the report—drafted by a local consortium Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc. bolstered by the international support of SGS and Martindale Consultants— there was a meticulous breakdown of five instances where the Stabroek Block’s financial resources were used for Kaieteur –a block Exxon walked away from this year –as well as Canje.

In the first instance, the report states that Exxon used Stabroek Block revenues to cover a permit fee for a Kaieteur Geotechnical and Geophysical Survey. When auditors made this discovery and roasted Exxon for such a flagrant violation of international best practices, Exxon agreed that it should not have occurred. As a result, auditors asked that the US$16,039 used to cover that survey be returned to the Stabroek Block cost bank. Auditors said this was done in October 2022.

In the second instance, auditors found that Exxon included its cost recovery statement for the Stabroek Block, 100% of the costs associated with an Emergency Response Study for oil spills from Guyana wells. Auditors said the Stabroek Block revenues should not have been used to cover 100 percent of this activity since the study looked at wells in the Kaieteur and Canje blocks. Auditors said Stabroek’s share should have been 50% of the cost or US$ 32,575 while Canje’s share should have been 25% or US$16,287.64 and Kaieteur’s share 25% or US$16,287. Exxon was therefore asked to return US$ 32,575 to the Stabroek Block’s account.

In the third case, auditors said Exxon charged the Stabroek Block’s producing projects, 100 percent of the cost for various vehicles. Auditors said these vehicles were purchased in support of all the operator’s Guyana operations, not just Stabroek, hence the costs have to be allocated to all blocks. Auditors said they were verbally advised by Exxon that the 100 percent charge to Stabroek was proper because, paraphrasing, “the reason the contractor was in the country was because of Stabroek operations.”

Auditors said they argued against such a perverse reasoning. They said while the Stabroek Block may be Exxon’s major development at this point since 11 billion barrels of oil resources have been unlocked, the oil giant still explored for oil in Kaieteur and Canje where additional exploration activities are planned. The auditors contended therefore that since the vehicles are also used to support activities related to the Kaieteur and Canje Blocks, Exxon must return US$404,285 to the Stabroek Block account.

In the fourth case, the auditors said Exxon charged the account of producing Stabroek Block projects, 100 percent of the renovation costs for Exxon’s Duke Street office, including upgrades, furniture, and setup costs. Auditors reasoned that Exxon operates all of its Guyana operations out of the Duke Street office, so charging 100% of the more than US$6 million of renovation costs entirely to the Stabroek Block’s account “is patently inequitable.”

Auditors further explained that basic accounting rules hold that capital costs for assets that benefit multiple properties should be charged to the benefitting properties based on usage or other metric over time. “Under no circumstance should one property bear 100% of the capital costs simply because it was the first property developed, because it is larger, or because it is ‘more important’ than others,” auditors said as they insisted that the Stabroek Block account be reimbursed with US$3,812,653.

In the fifth case, auditors found that Exxon charged the account of producing Stabroek Block projects 100% of the costs from Environmental Resources Management, ERM Guyana, and RPS Group for various studies on the impact of oil and gas operations on fish, bird, and turtle migrations, habitats, and survival. Auditors specifically stated that Exxon should have applied a 75% cost allocation for the studies to Stabroek and 12.5% each to Canje and Kaieteur. Auditors therefore urged Exxon to return US$1,391,902 to the Stabroek Block account.

Overall, the five cases show that Exxon used US$5.6 million in Stabroek Block revenues to cover expenses that ought to have been applied to the books for the Kaieteur and Canje Blocks.

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2. ExxonMobil brazenly used Stabroek Block profits to pay drill ships to standby for Kaieteur and Canje Blocks

The second audit report on ExxonMobil Guyana Limited’s expenses totalling US$7.3B has exposed how the company brazenly used Stabroek Block profits to pay for drill ship expenses related to two separate and distinct blocks—Kaieteur and Canje.

The auditors which consisted of local consortium, Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc. with support from international firms, SGS and Martindale Consultants, expressed alarm at such a practice by the oil giant.

Expounding on their finding in this regard, the auditing team said Exxon had four drill ships from Noble Corporation working during early 2020. However, the COVID-19 pandemic made staffing all four vessels challenging. Auditors were informed that Exxon took the decision to suspend the services of the Stena Carron drillship and the Noble Tom Madden and move them closer to shore into a “hot standby” (idle but still operational) mode until the staffing issues could be alleviated.

Auditors said they had no qualms about Exxon charging 100 percent of the standby costs for the Noble Tom Madden against the Stabroek Block account since records show it was later used to service that block alone during the subsequent 12-month period.

In the case of the Stena Carron, auditors said records show Exxon had Stena on standby to execute works for Stabroek as well as Canje and Kaieteur which it walked away from this year. Records show that Exxon had the Stena Carron drill ship drill the Tanager-1 well in the Kaieteur Block beginning September 9, 2020 and ending November 23, 2020. Stena was then moved to the adjacent Canje Block where it worked on the Bulletwood-1 well beginning December 31, 2020 and ending March 2, 2021. Stena was also used to drill the second well in Canje called Jabillo-1 beginning March 12, 2021 and ending March 20, 2021.

In light of this, auditors said Exxon had no right charging the full standby costs to the Stabroek Block account if it had intentions of using the said ship on two other blocks. Exxon however told the auditors that it believes “all costs should remain charged to Stabroek” adding that its partners, Hess Corporation and CNOOC Petroleum Guyana Limited are in alignment on this matter.

Auditors however noted that such “alignment” is irrelevant to the case at hand and maintained that the standby costs ought to be shared among the blocks that utilized the Stena Carron. Exxon was then asked to return US$4,176,934 to the Stabroek Block account.

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

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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4. Exxon billed Guyana US$10.3M for private drivers, US$2.2M in school fees for expats’ children

A recent audit report has exposed that ExxonMobil Guyana Limited removed US$12.5M from the Stabroek Block account to cover expenses related to transporting its personnel around the country as well the tuition fees for the children of its international workers.

Following the field work done by local consortium, Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with the international support from Martindale Consultants, it was found that Exxon charged approximately US$10.3M for private drivers to take its employees in and around the country.

Auditors said the details they reviewed did not contain information to differentiate what trips are taken, by whom, and to where. It therefore means that auditors have no way of telling if Exxon employees alone are racking up those costs. They also had no way of telling if those trips are for work or pleasure.

Specifically, auditors said the 2020 costs were approximately US$400,000 per month and were for vehicle rent, drivers, dispatch, supervision, fuel, and maintenance. Auditors said there are approximately 90 vehicles and eight buses used to transport personnel in-country. Kaieteur News understands that over 95% of the costs were allocated to the Stabroek Block account with the remainder being charged against Canje and Kaieteur (a block Exxon walked away from in September).

Auditors said they also observed that Exxon charged Guyana’s Stabroek Block account US$2.2M to cover for registration, tuition, and other fees required by the Georgetown International Academy, a school attended by the children of expatriates.

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5. Auditors could not check expenses for over 1000 travel records for Exxon

A team of local and international auditors which examined ExxonMobil Guyana Limited’s expenses incurred in the Stabroek Block totalling US$7.3B have made it clear that they were not able to examine every record of expenditure.

As an example of this, auditors attached to Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc with backing from Martindale Consultants said there were more than 1,000 travel expense reports by ExxonMobil. Those records are for the period 2018 to 2020.

The report with the finding of the auditing team said, “We requested and reviewed the larger dollar ones as well as smaller dollar amounts expense reports where the contractor’s information may have suggested a non-Petroleum Operations nature of the expense.”

The report added, “We identified many travel expenses that were not for Petroleum Operations.” The auditors said many of these expenses it found were for corporate activities and had nothing to do with the petroleum operations in the Stabroek Block.

Auditors also outlined the complex nature of auditing Exxon’s books as they said the company’s accounting “is extremely tedious, requiring intensive concentration and diligence to understand.” Auditors outlined for example that Exxon has more than 180 files that costs are booked into, with many of those costs then flowing into a second set of folders and then further broken down into other tiers. There are even cases where a cost booked into one file must be traced through five other features to see the eventual charge or full allocation.

Be that as it may, the auditors said they were able to understand a lot of Exxon’s accounting which they believe will be invaluable when applied in future audits.

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6. Exxon used Guyana’s oil profits to make films and documentaries about its unprecedented success here

A team of expert auditors attached to Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting and Consultancy Inc with backing from Martindale Consultants, have unearthed a number of improper financial practices by ExxonMobil Guyana Limited.

According to a report seen by this news agency, the auditing team reviewed over US$7B in cost recovery bills by Exxon for the period 2018 and 2020. During its review, auditors said Exxon used US$1.5M of Guyana’s oil profits for film productions detailing the contractor’s progress and operational successes in Guyana’s Stabroek Block. Auditors were keen to note that Exxon had no right taking Guyana’s oil profits to cover public relation expenses as they have nothing to do with petroleum operations.

Auditors said, “A cost must be carried out for, or in connection with, production operations for the cost to be recoverable.” On that premise, auditors said Exxon’s use of US$1.5M to hire Myriad Global Media and Falcon Logistics film and documentary production services was improper.

Kaieteur News understands the money was spent on the production of films for ExxonMobil and its contractor Saipem, to produce a film on the Liza Phase Two Project including animation and graphic, and to provide communication tools throughout the Liza Project Development.

The expenditure also covered the production of a logo design for the Liza Phase Two Project, filming at various facilities for the Liza Project, and the production of a film to explain the flowstream process of a floating, production, storage and offloading (FPSO) vessel for external consultants in Guyana.

Auditors said a portion of the money also went towards the creation of a Liza Phase One First Oil appreciation book.

Auditors said they were told by Exxon that the costs are recoverable, contending that the media items were used for internal and external communications in connection with and for the benefit of Stabroek contractor petroleum operations. “There are several videos, pictures and key project information used on various platforms and outlets to communicate progress of FPSO construction, provide overview/education related to petroleum operations, etc. to Guyana. Content can be viewed at: www.guyanaprojects.com,” Exxon said.

Auditors were however not convinced by the company’s explanation and insisted that costs for public relations are not recoverable under the Stabroek Block Production Sharing Agreement (PSA). The team therefore instructed that the money be returned.

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7. Auditors unable to determine how much Exxon charges Guyana for dumping toxic water into ocean

A team of local and international auditors have been unable to ascertain how much money ExxonMobil Guyana Limited removes monthly from the Stabroek Block account to cover bills it claims are for treating and dumping produced water into the ocean.

Research indicates that produced water in the oil and gas sector refers to the water that comes up from underground along with oil or gas during their extraction. It is a mixture of water that existed naturally in the oil or gas reservoir and additional water that was injected into the reservoir to help push the oil or gas to the surface. This water often contains various toxic chemicals, minerals, salts, and other impurities, so it needs to be treated or managed before it can be reused, discharged, or disposed of in any fashion.

During their assessment of US$7.3B in expenses Exxon incurred from 2018 to 2020 in the Stabroek Block, auditors attached to Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with backing from Martindale Consultants said they could not determine how much Exxon was charging Guyana for dumping produced water.

Auditors said they saw no specifically identified operating costs for the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel leased to Exxon by SBM Offshore through a subsidiary. Auditors said services for the FPSO are billed in large sums on one or two monthly invoices. However, there is no breakdown of the expenses.

“Our research also indicates that the Contractor (Exxon) was to conduct a cost-benefit analysis of re-injecting produced water (into a separate well) vs. treating and overboarding such water for the Payara development (Exxon’s third oil project in the Stabroek Block) and was required by the Guyana Environmental Protection Agency (EPA). We do not have any information about whether this study was completed or its results,” the auditors said in their report.

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8. Exxon spends US$millions of Guyana’s profits to promote self at local business events

The latest audit report on ExxonMobil’s expenses totalling over US$7 billion has flagged a number of bills which are not in connection with petroleum operations.

According to the report compiled by Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with backing from Martindale Consultants, ExxonMobil spent US$4.9M on promoting itself at the events hosted by local business groups as well as for travel and rent expenses for its expatriates which were not in keeping with the conditions outlined in the 2016 Stabroek Block Production Sharing Agreement (PSA).

Auditors said the PSA states that all costs, expenses and expenditures can only be recovered provided that they are relating to the petroleum operations. The team of experts said, “…a cost must be carried out for, or in connection with, production operations for the cost to be recoverable.”

Kaieteur News understands that Exxon acknowledged that the costs are not recoverable because it reversed more than US$2M charged in another case for sponsorships, social media management, and other similar costs. On such a premise, the auditors argued that Exxon must do the same and return the flagged sum to the Stabroek Block account.

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

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.

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10. Exxon used Stabroek Block Profits to splurge on holiday gift vouchers for security guards, escorts for Execs and security for expats’ family fun day

The second audit into ExxonMobil Guyana Limited’s expenses show that the oil company used a portion of the Stabroek Block profits to splurge on holiday gift vouchers for its security personnel, cover escorts for its Executives around Georgetown and pay security personnel for a family fun day for its expatriates.

Auditors which included Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with backing from Martindale Consultants, made the foregoing observation after examining over US$7B in expenses Exxon incurred during 2018 to 2020.

In the report seen by this newspaper, auditors said Exxon must return US$75,323 to the Stabroek Block account because it was used to cover security and other corporate expenses that are not allowed under the block’s Production Sharing Agreement (PSA).

Auditors referenced Annex C of the Stabroek Block PSA which states that all costs, expenses and expenditures must be related to petroleum operations if they are to be recovered. The auditing team was emphatic that security expenses and gift vouchers are corporate expenses. They therefore ordered that the sum of US$75,323 be returned to the Stabroek Block account. Kaieteur News understands that Exxon only reimbursed the account with US$ 2,398. Auditors maintained however that the full amount must be repaid.

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

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.

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12. Auditors expose ExxonMobil’s recovery of US$MILLIONS in VAT from Stabroek Block account instead of awaiting GRA refunds

The second audit report on ExxonMobil Guyana’s expenses has exposed numerous ways the oil giant is taking advantage of the profits being made from the oil producing projects in the Stabroek Block.

In the report drafted by a local consortium, Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc. and bolstered by the international support of SGS and Martindale Consultants, auditors found that Exxon recovered US$ 3,574,393 as 14% Value Added Tax (VAT) assessed on various third-party invoices.

Auditors were shocked after making this discovery as they noted that Exxon, according to its Stabroek Block Production Sharing Agreement (PSA), is exempt from VAT. In light of that exemption, auditors said VAT should never appear on Exxon’s cost recovery statements.

Auditors pointed out that Article 15.1 of the Stabroek Block PSA deals with “Taxation and Royalty.” That section specifically states that Exxon “IS NOT SUBJECT TO VAT.” In fact, Article 15 goes further to state that no tax, value-added tax, excise tax, duty, fee, charge or other impost shall be levied on Exxon or even its affiliated companies in respect of income derived from petroleum operations or in respect of any property held, transactions undertaken or activities.

Auditors said Exxon acknowledged it is exempt from VAT, but still said that it nonetheless pays VAT when included on vendor invoices and therefore charges VAT to the cost recovery statement.

Exxon advised that the Guyana Revenue Authority (GRA) has not yet issued exemption letters for all vendors, so it must pay VAT as invoiced until it receives vendor-specific letters which will then allow the vendor to cease assessing VAT. Exxon also said it identifies VAT paid each quarter in these instances and moves the VAT amounts into a “VAT Account” for tracking purposes. Exxon said it then submits a monthly refund request to the GRA, which Exxon advised, typically takes six-to-12 months to receive. Exxon said VAT refunds are credited to the Stabroek Block account when received.

Auditors however noted that such a practice is not in keeping with the requirements of the Stabroek Block Petroleum Agreement. Auditors acknowledged that there are a number of arguments Exxon could proffer in an attempt to justify recovering VAT until it is refunded by GRA.

Be that as it may, auditors stressed the fact that Exxon is exempt from VAT and as such, VAT should never appear as an item on its Cost Recovery Statements. Auditors said Exxon eventually agreed to remove the VAT from the Cost Recovery Statement. In addition to crediting the Stabroek Block account with US$ 3,574,393, auditors said Exxon was requested to cease including any future VAT amounts against the Stabroek Block while awaiting refunds from GRA.

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13. ExxonM billed Guyana US$753M for foreign workers here and abroad

 – Auditors clueless on what overseas employees did for Stabroek Block Projects

ExxonMobil Guyana Limited spent a whopping US$759M on labor costs between 2018 and 2020. This was observed in an audit report compiled by local team, Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with backing from Martindale Consultants. The auditors found that US$753M was for foreign employees alone.

In providing a breakdown of the US$753M, auditors said US$93.1 million was for expatriates serving in-country at ExxonMobil Guyana Limited which has its head office in Duke Street, Kingstown. For the overseas workers permanently assigned to its Guyana operations, the labour cost was US$594.4M.  For those foreign employees that were only temporarily assigned, the employment bill was US$66.4 M.  For local employees, the labour bill was US$5.1M.

Auditors outlined that employee costs for Exxon Mobil Guyana Limited formerly known as Esso Exploration and Production Guyana Limited (EEPGL) is catered for in the Stabroek Block Production Sharing Agreement (PSA) as a recoverable expense. Be that as it may, auditors flagged several anomalies regarding the manner in which Exxon bills the Stabroek Block account for employment costs. Expounding on this front, auditors said the majority of employees attached to ExxonMobil Affiliates overseas are required to keep time-writing entries. This is where an employee documents the hours spent on Stabroek Block Projects.

An hourly rate is calculated, ranging from US$ 343.00 to US$ 495.00 per hour, with the majority of the rates closer to US$ 400.00 per hour. The rates represent an employee’s salaries, wages, benefits, and all other related employee costs.

Approximately 1,500 employees had time-sheets throughout the review period (2018 to 2020). The employees were attached to the following Affiliates: ExxonMobil Development Company, ExxonMobil Global Projects Company, ExxonMobil Production Co., ExxonMobil Upstream Research Company, ExxonMobil Exploration Company, ExxonMobil Canada Ltd. And ExxonMobil Exploration and Production Mozambique (Ventures) Limited.

Auditors said they did not examine all 1,500 time sheets but based on their test of a sample of those, it was not able to determine what works were actually executed for Guyana. Auditors said none of the timesheets or other time tracking information provided any detail as to what an Affiliate employee was doing for the Stabroek Block Operations. “The information was simply printouts of the employees and Cost Objects or Orders to which they coded their time,” the auditors said.

Auditors also noted that there were significant costs for ExxonMobil Affiliates employees outside of Guyana that were temporarily assigned to Stabroek-specific projects. These employees were attached to ExxonMobil Netherlands, ExxonMobil Singapore, ExxonMobil Exploraco Brasil LTDA, and ExxonMobil Quimica LTDA.

Auditors found that Exxon was paying these Affiliate employees their salaries as well as a profit. Auditors said this profit margin is not recoverable based on the terms of the Stabroek Block Production Sharing Agreement (PSA). Auditors therefore requested that the Stabroek Block account must be credited with US$ 3,314,007. Exxon at the time of the report’s compilation, only returned US$2,203,071. The remainder totalling $1,110,936 is still outstanding.

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14. Exxon refused to hand over Guyana’s raw oil production data to auditors

The team of local and international auditors who collaborated on reviewing ExxonMobil’s expenses totalling US$7.3B for the period 2018 to 2020 has informed the Guyana Government that they were not provided with all the data and information they requested from the company.

Specifically, the team said in a report seen by this newspaper that Exxon was asked to provide a schematic diagram showing all metering points on the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel. The auditors said a schematic would provide a visual representation of the physical flow of production as it is produced onto the FPSO through the various types of production equipment, and into the storage tanks.

Auditors said ExxonMobil was adamant that it would not provide the raw data or the schematic on the amount of oil and gas it produced. Auditors said Exxon “consistently stated that production information was outside the scope of the cost recovery audit.” Furthermore, Exxon told the auditors that only sales information would be provided.

While they were denied this raw information requested, auditors said they have no reason to conclude that the production data presented in monthly statements to government would differ from the raw measurement data utilized by Exxon for production management. In addition, Exxon told auditors that the Guyana Government has key personnel who are fully aware of all measurement points and are present for calibrations and offloads, hence there is no need to worry.

Be that as it may, auditors advised that Exxon should make the schematic diagrams available for future audits as it would help to validate the volumetric data provided in the monthly statements submitted to the Guyana Government.

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15. ExxonMobil slapped Guyana with US$58.5M in COVID-19 bills for 2020

A team of local and international auditors examining ExxonMobil Guyana’s expenses for the period 2018 to 2020 found that the company submitted US$58.5M in COVID-19 bills of which US$18M was dedicated for chartered flights. Notably, the auditing period only examined the first year, 2020, when the COVID-19 pandemic hit these shores.

Significantly, auditors said the COVID-19 costs were not incurred just in Guyana, but also in Houston, the United Kingdom, and Trinidad and Tobago. Those costs were in separate files labeled Houston Facility costs, United Kingdom (UK) Facility costs, Flights, Guyana Facility, etc.

In total, auditors found that the Stabroek block account was charged 90% of the COVID-19-related costs, while Canje and Kaieteur [a block it walked away from earlier this year] received 10% in total.

This newspaper understands that Exxon charged approximately US$9,000,000 for recoverable hotel and hotel-related costs, the majority of which was for the Atlantic Hotel (Marriott) in Guyana that included blocks of rooms whether occupied or vacant. Other hotel costs were for Cara Lodge and Pegasus Hotel in Guyana and hotels in Trinidad, the United Kingdom, and the U.S. used for quarantining individuals prior to traveling to Guyana.

Exxon also charged approximately US$18,000,000 for COVID-19-related chartered flights, including travel voucher taxes, and pre-flight COVID-19 tests, aviation fuel, and catering for flights. Chartered flights from London using British Airways totaled US$1,300,000 while flights from Huston using United Airlines were US$1,200,000.

Exxon also charged approximately US$2,000,000 for various medical staffing and supplies, including test kits, nurses, masks, gloves, and hand sanitizer. The oil giant also charged approximately US$11,000,000 for staging employees for operations, including staging coordinators, security, medical, and catering specific to operations.

Kaieteur News also learnt that Exxon charged approximately US$210,000 for facility management expenses such as janitorial, tent rentals, electrical and generator repairs, and various sanitization supplies. It also charged approximately US$1,300,000 of employee or affiliate costs for standby, quarantine, and staging costs.

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