Exxon not budging on US$214M disputed costs

Oct 10, 2024 News

– but wants settlement outside of arbitration

Exxon not budging on US$214M disputed costs

President of ExxonMobil Guyana Limited, Alistair Routledge

Kaieteur News – Oil giant ExxonMobil while not budging on their position with regards to the US$214M disputed costs wants the dispute to be settled outside of arbitration.

This was disclosed by the company’s Country Manager, Alistair Routledge on Wednesday at a press conference at their Duke Street head office in Kingston Georgetown. Routledge was asked by a reporter, “Could you say if ExxonMobil is proceeding to arbitration over the disputed US$214.4M in cost oil from the IHS Markit audit?”

Explaining that the company is continuing to work on the audits and there are ongoing discussions between them and the Guyana Revenue Authority to facilitate the exchange of information he said that while they didn’t have “any specific news to say, I don’t have any intent to call on an arbitration, I don’t think that that’s the right way to get to resolution but at the end of the day it’s laid out in the petroleum agreement, the manner in which to approach this. Ultimately the next step would be to involve an independent expert and if we can’t resolve that way there is the provision for arbitration, but arbitration is generally a last resort and quite expensive process.”

At a recent press conference Vice President Bharrat Jagdeo told the media that the Government of Guyana (GoG) will not be engaging in any settlement with ExxonMobil over the US$214million in questionable costs flagged by British auditor, IHS-Markit. Jagdeo was asked 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 Stated 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 said.

(Exxon not budging on US$214M disputed costs)

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Exxon, ExxonMobil, Georgetown, Government, Jagdeo, Routledge

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