Drilling company used by Exxon will fight to defend disputed costs in Guyana, other countries

Mar 16, 2024 ExxonMobil, News, Oil & Gas

One of Noble drill ships working offshore Guyana

Kaieteur News – Noble, an American drilling company with a global footprint has found itself entangled in a web of legal disputes over audit claims amounting to approximately US$172.1 million as of December 31, 2023.

These claims, primarily relating to income and other business taxes are across multiple jurisdictions, including Guyana, Mexico, Australia, Saudi Arabia, Nigeria, Ghana, and Egypt.

Notably, it was stated that such audit claims are attributable to Mexico related to tax years 2007 and 2009, Australia related to tax years 2013 to 2016, Guyana related to tax years 2018 to 2021, Saudi Arabia related to tax years 2015 to 2019, Nigeria related to tax years 2010 to 2019, Ghana related to tax years 2011 to 2017, and Egypt related to tax years 2012 to 2016.

This publication had previously reported that Exxon is utilising six drill ships for its Stabroek Block project – four vessels from Noble Corporation and two from Stena Drilling.

In response to the mounting challenges, Noble in a resolute stance, asserted its unwavering commitment to defending its reported positions against the audit claims.

“We intend to vigorously defend our reported positions and currently believe the ultimate resolution of the audit claims will not have a material adverse effect on our consolidated financial statements,” the company said.

The company remains steadfast in its belief that the ultimate resolution of these disputes will not yield a material adverse effect on its consolidated financial statements.

However, Noble acknowledges the fluidity of the situation and the imperative need for continuous monitoring and evaluation as audits and potential litigation proceedings progress.

The disclosure of Noble’s audit claims comes against the backdrop of heightened scrutiny surrounding ExxonMobil Guyana Limited’s expenditure practices.

A recent audit report, yet to be made public, has cast a spotlight on the oil giant’s cost allocation practices, particularly concerning the utilization of profits from the Stabroek Block to cover drill ship expenses related to other blocks, namely Kaieteur and Canje.

The auditors, comprising a local consortium supported by reputable international firms, have raised serious concerns over Exxon’s allocation practices. They have highlighted instances where standby costs for drill ships were charged against the Stabroek Block account, despite the ships being deployed for activities across multiple blocks. The report’s findings have triggered calls for enhanced transparency and accountability in the management of oil revenues, with stakeholders urging Exxon to address the discrepancies identified in the audit.

Notably, the audit report focused on expenses totaling a staggering US$7.3 billion incurred by Exxon between 2018 and 2020 for flagship projects such as the Liza Phase One and Liza Phase Two.

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Audit, drill ships, Exxon, Guyana, Noble

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