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Exxon falsifies records to claim full costs for environmental studies – audit finds 

May 23, 2024 News

Kaieteur News – In a recent audit of the Cost Recovery Statement, it was revealed that ExxonMobil Guyana Limited (EMGL) included 100 percent of the costs incurred from Environmental Resources Management (ERM), ERM Guyana, and RPS Group for various environmental studies.

The audit was undertaken by VHE Consulting and relates to the expenditure incurred between 2018 and 2020. It found that a portion of these costs should have been allocated to non-Stabroek operations, including the Canje and Kaieteur blocks. The studies referenced sought to examine the impact of oil and gas operations on fish, bird, and turtle migrations, habitats, and survival, were allegedly necessary for the Payara Environmental Impact Assessment (EIA) in the Stabroek Block.

EMGL, according to the auditors, argued that these studies were integral to the Payara EIA and were required following the issuance of an environmental permit for the Payara project.

According to the report, since made public, EMGL also emphasized that these studies were fundamental to the Oil Spill Response Plan (OSRP) for Guyana, which includes a Wildlife Response Plan and as such claimed that the costs should be charged entirely to the Stabroek Block. The Auditors found however, that the studies in question have a broad geographic scope, covering the entire Guyana offshore area, and are part of multi-year programmes and as such, both the Canje and Kaieteur blocks also benefitted from these services.

According to the auditors, all three blocks face similar risks to marine life and their habitats, and at the time these studies were conducted, all blocks were involved in active drilling activities. To This end, it indicates that the OSRP needed to address potential oil spills across all blocks, not just Stabroek. With this in mind, the audit recommended a cost allocation of 75 percent to Stabroek and 12.5 percent each to Canje and Kaieteur, reflecting the benefits each block received and the level of activity expected in the future.

This recommendation, the auditors said, was based on the premise that these studies provided critical data for responding to oil spills in any of the blocks, thereby benefiting all.

According to VHE Consulting, EMGL in disagreeing with the cost-sharing approach maintained that the studies were initiated solely for the Payara EIA and that Canje and Kaieteur blocks, not being in development were not relevant to these studies.

Further, the auditors documented that EMGL also stated that future environmental study requirements for Canje and Kaieteur cannot be predicted at this time. Despite the assertions by EMGL, the audit underscored that the environmental studies benefitted all blocks, irrespective of their development status—data crucial for managing risks and responding to oil spills across all EEPGL-operated blocks.  Consequently, EMGL has since been requested to adjust the Cost Recovery Statement to reflect an equitable distribution of costs among the Stabroek, Canje, and Kaieteur blocks.

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