Latest update December 23rd, 2024 3:40 AM
Before oil began pumping, Guyana paid over US$27,000 daily between 2015 and 2017 for Exxon’s Helicopter services – audit report finds
A Bristow Helicopter used by ExxonMobil Guyana for its oil and gas operations in the Stabroek Block
Kaieteur News – Before Guyana began producing the sweet light crude discovered in the prolific Stabroek Block, ExxonMobil was chartering helicopter services that cost the country a whopping $5.4M daily.
This finding was exposed in the US$1.6B audit, conducted by a British firm, IHS-Markit. The leaked report detailed that the oil giant in 2015 contracted a Trinidadian company, National Helicopter Services Limited at a total cost of US$5.1M. In 2016 and 2017, the company then recruited the services of a UK firm, Bristow Helicopters International at a cost of US$11.6M and US$12.9M, respectively.
A closer look at the audit report shows that Exxon had sole-sourced the Trinidadian company to provide the helicopter services in 2015. The auditors said, “Over the audit period, there were two providers of helicopter services to the offshore facilities in Guyana. On comparison of the contracts between the two providers it has been observed that Bristow helicopter contract was tendered (i.e. awarded on a competitive basis) while the award to National Helicopter was single sourced.”
The report explained that the Bristow Helicopter contract was relative to the prevailing market rate, whereas a higher cost was paid to National Helicopters Services International. The auditors said the cost required justification which was not provided by ExxonMobil. It therefore recommended that the additional amount of US$1,604,544 paid to National Helicopter should not be allowed in the cost bank without the justification.
This newspaper also analyzed the audit report submitted by VHE Consulting for the years 2018 to 2020 but could not find any costs related to helicopter services. It must be noted however that these charges are likely to be significantly higher now, since oil production activities commenced offshore in 2019. Helicopters are used in oil and gas industry as a faster means of transport for crew members, compared to boats.
It must be noted that while the Guyana Revenue Authority (GRA), assigned by the Government of Guyana’s to provide key oversight on the audit has signalled its approval of the report submitted by IHS-Markit and recommended that the audit findings be accepted, there has no progress in the pursuit of the disputed costs flagged by IHS-Markit.
The Consultant was hired back in 2019 to conduct a review of Exxon’s expenses during the period 1999 and 2017. IHS in its 2021 report flagged a total of US$214.4M in questionable or unjustifiable costs billed to the country by ExxonMobil.
Commissioner General of the GRA, Godfrey Statia in a public missive said on October 18, 2023, “The Authority wishes to categorically re-iterate that it stands by its advice to the Ministry of Natural Resources and the Government of Guyana that the Cost Bank Adjustment of US$214.4M as reported in the ‘Audit Report Recommendation Final’ by IHS Markit is the accepted final figure.”
Statia also made it clear that its correspondence to IHS Markit, seeking clarity to the said “Audit Report Recommendation Final” and copied to EMGL should in “no way or form” be construed as a change in the Authority’s position that the Cost Bank Adjustment of US$214.4M be adjusted, nor to re-open the process.
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