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Jagdeo refuses to update nation on efforts to recover Guyana oil profits used by Exxon for works in Kaieteur and Canje blocks
Kaieteur News – Vice President Bharrat Jagdeo has refused to update Guyanese citizens on the progress government has made to recover monies the auditors revealed was spent by oil giant Exxon Mobil from the Stabroek block to pay for works done in the Kaieteur and Canje blocks. The VP was addressing the media on Thursday during his weekly press conference at the Freedom House on Robb Street.
Vice President Bharrat Jagdeo.
Jagdeo, the chief policymaker in the oil and gas sector has refused in recent months to answer a number of important questions crucial to his portfolio. Among the questions are: the status Guyana’s oil reserve; the rental fee Exxon is paying for the capping stack it recently brought into the country and how much the company is paying to treat produced water from its offshore operations. Jagdeo has also refused to provide a comprehensive updates on the audit findings as well as the interest rates being charged by ExxonMobil Guyana Limited (EMGL) on its investments.
On Wednesday he was asked by the Kaieteur News to say if there were “Any development to recover the money the auditors discovered Exxon spent in the Kaieteur and Canje oil blocks?” Jagdeo responded: “So the last time you said that the minister doesn’t want to answer some of your questions. So he will have a press conference and all of these routine things, that are not policy-based you can find out there.” This publication reported previously that the audit team that reviewed ExxonMobil’s US$7.3 billion expenses, incurred between 2018 and 2020, found that the company used $323 million of the revenue generated in the Stabroek Block to purchase vehicles that were used for operations in the Kaieteur and Canje Blocks.
According to the report completed by the auditors, ExxonMobil Guyana Limited (EMGL)- previously Esso Exploration and Production Guyana Limited (EEPGL)- the operator of the Stabroek Block included in its cost recovery statement 100 percent of the costs for various vehicles.
The auditors, however, determined that the vehicles purchased were used for all of Exxon’s operations, including those outside of the Stabroek Block. Consequently, auditors informed the company that the costs should be allocated across the blocks. In response to the findings of the auditors, ExxonMobil confirmed that the vehicles charges were deducted from the Stabroek block. The company, however, disagreed that that the vehicle costs should be shared. Auditors said Exxon “verbally advised that the 100 percent charge to Stabroek was proper because, paraphrasing, the reason the Contractor was in the country was because of Stabroek operations.” The report highlighted that US$1,617,143.85 in vehicles were purchased during the period 2018 to 2020 from Beharry Automotive LTD, Ideal Autos Inc., and Massy Motors Guyana LTD. This amounts to just over GYD$323 million. Even though government has said that this use of the Stabroek Block funds to offset expenses in the other blocks is illegal, Exxon will not be facing any penalties of any sort. Jagdeo had said at a previous press conference that the contract the oil giant signed with Guyana means that the expenses will not be included in the cost bank for the Stabroek Block. “I maintain my position that it would be illegal and I repeat that. The audits would have revealed that now and as I said before there will be consequences. If you did unauthorised work you don’t go to jail according to PSA, it just doesn’t form part of the cost bank,” the VP said.
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