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ExxonM still holding firm to US$214M questionable costs
– Jagdeo says Govt. will be more vigilant going forward
Kaieteur News – Vice President (VP) Bharrat Jagdeo has revealed during his weekly press conference on Thursday that the government and Exxon Mobil Guyana are currently in a dispute over US$214 M questionable costs that the first audit revealed the oil company recovered from the country.
Vice President, Bharrat Jagdeo
Jagdeo said that, “right now we have a dispute over that sum if Exxon decides to pay it or accept it then we don’t have an issue.” He further explained that if Exxon refuses to do either of those they will ultimately end up in arbitration. “This point about them using resources, Exxon using resources from the Stabroek Block which is ring-fenced for activities in Kaieteur and Canje, for me that is illegal.”
The VP stressed that according to the Production Sharing Agreement this should not be done so “therefore we constantly have to be vigilant once Exxon continues to be an operator for oil blocks outside of the Stabroek Block, then we have to continue to be vigilant in every audit to see that it doesn’t happen.”
This publication has reported extensively on this issue since it first came to light some months ago. Recently the Kaieteur News reported that the Government of Guyana (GoG) has made it clear that it will not be engaging in any settlement with ExxonMobil over the US$214 million in questionable costs flagged by British auditor, IHS-Markit. The VP was previously asked during his weekly press conference, by this newspaper whether government has considered settling the dispute with the oil giant given how tedious the process has been and the fact that Guyana will be required to cover the costs of Exxon’s legal defence. To this end, Jagdeo informed that the GoG has been guided by two sets of advisors on the matter that have both recommended that the US$214M sum be returned to the cost bank. This means that the US$214M will be split as profits, which will allow Guyana to receive US$107M while Exxon will enjoy the other US$107M.
Consequently, Jagdeo asserted, “I don’t believe there is scope at this stage for settlement especially given the magnitude of reduction.” He explained, “Exxon is talking about moving from US$214M to US$3M and if we settle with that, then it’s only half of that we get and so those figures are not palatable at all.” As such, the former Head of State noted, “We may have to go to arbitration.”
Meanwhile, he told reporters that government has not done an assessment of what the arbitration process would cost. He however pointed out that he believes this is the fittest method. “Given all that has happened, I think you need an independent third party on this. If you settle on any figure, say US$214M with Exxon, people will say oh you caved to Exxon, if you settle at US$3M, it is worse so a third party is needed to deal with all of these issues. We should not engage, I think, in any negotiations,” the VP had said.
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