Auditors instruct Exxon to return Guyana’s $52M oil profits used to purchase branded caps, fishing shirts and sweatpants

Dec 03, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – Between the period 2018 and 2020, United States oil major, ExxonMobil engaged in a spending spree using Guyana’s revenue from the Stabroek Block.

President, ExxonMobil Guyana Limited, Alistair Routledge

This glaring observation has been captured by the local audit team Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc. that was supported by international firms, SGS and Martindale Consultants. The local consortium was contracted by the government of Guyana in May 2022, to undertake a four-month review of the expenses racked up by the operator of the Stabroek Block, ExxonMobil Guyana Limited (EMGL) during the 2018 to 2020 period.

According to the findings of the report that has been handed over to government, ExxonMobil spent a total of US$266,490.32 on promotional items such as caps, tumblers, Columbia fishing shirts, t-shirts, sweatpants, sweatshirts, fleece pants and others, all branded with the Contractor’s and/or vendor logos.

The auditors flagged the sum highlighting that those costs were not related to the petroleum operations and could therefore not be recovered by the company.

They pointed out that the Production Sharing Agreement (PSA) signed between Guyana and the Stabroek Block Co-Venturers define petroleum operations as “Prospecting Operations and/or Production Operations…”

To this end, the auditors informed the company that the cost must be carried out for, or in connection with, production operations for the sum to be recoverable. In fact, they instructed Exxon to return US$259,690.32 or approximately GYD$52M. The company was granted an exception on US$6,800 that was used to purchase safety glasses.

Not satisfied with this exception however, ExxonMobil in its response to the audit findings said, “It is common practice in the international oil and gas industry for such items to be awarded to Contractor and Sub-Contractor personnel for employee recognition and safety performance. The identified awards were not in any way used as promotional items.”

Kaieteur News understands that the auditors have maintained the position that the $52M is not recoverable by the Contractor.

The audit team also found several other acts of brazen misuse of the revenues generated in the Stabroek Block. For instance, it was reported by Kaieteur News that ExxonMobil was 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.

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

It was also reported 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.

The audit report explained 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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Audit, branded, ExxonMobil, oil, profits, Report

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