OGGN challenges Exxon to prove adherence to “highest ethical standards”

Dec 17, 2024 News

…cites failure of company to explain overstated precontract costs, defiance of int’l safety standards

Kaieteur News- Members of the Oil and Gas Governance Network (OGGN) have challenged ExxonMobil Guyana Limited (EMGL) to prove its adherence to the “highest ethical standards” as claimed by its lawyer in a December 8, 2024 letter to this publication.

General Counsel, Andrew Lodge in a letter responding to a citizen, on behalf of Exxon made it clear, “We adhere to the highest ethical standards and are committed to transparency and integrity in all our dealings.”

In disputing this statement, OGGN members, Alfred Bhulai, Andre Brandli, Ganga Ramdas, Kenrick Hunte, Darshanand Khusial and Mike Persaud argued, that the company does not even comply with the law.

OGGN challenges Exxon to prove adherence to “highest ethical standards”

OGGN members have been raising awareness in the United States about Guyana’s lopsided oil contract with ExxonMobil, protesting for changes to deal. (OGGN challenges Exxon)

OGGN said, “In 2018, Christopher Ram showed, using the oil companies’ own financial statements, that the pre-contract costs were overstated by at least US$92 million. If ExxonMobil is committed to integrity, it should explain why six years have elapsed and not a word to counter the integrity of Mr. Ram’s analysis.”

Meanwhile, the members highlighted that ExxonMobil does not pay taxes on its oil profits in Guyana. This is in keeping with the oil contract signed with the Government of Guyana that it receives tax receipts for taxes it did not pay.

OGGN however pointed out that more than 140 countries require companies like Exxon to pay at least 15% in taxes. It therefore reasoned, “Why is Guyana NOT among them? If Exxon claims transparency, it should publish the tax receipts it received from the Government of Guyana and disclose whether the receipts are used to receive a tax credit from the IRS.”

Shifting its attention to the company’s offshore operations, the members of the Network argued that ExxonMobil defies the rule of law and international safety standards. They noted that the Liza One and Liza Two projects are being operated above the design production rates.

“How can it be ethical to place Guyana and the Caribbean at the risk of a major oil spill especially when there is no parent company guarantee? How can ExxonMobil claim ‘the highest ethical standard’ given that this recklessness can bankrupt Guyana and many countries in the Caribbean,” the members asked.

In conclusion, they noted that numerous commentators in several countries have agreed that the Exxon contract is one of the world’s most lop-sided. To this end, OGGN said, “It is a principle of contract law that, if one party does not fully understand what it is signing, the contract is invalid. For ExxonMobil to continue to refer to ‘sanctity of contract’ in such a context shows substantial disregard for ethical standards. If ExxonMobil wants to be respected, it needs to live up to its grandiose claims.”

The Oil and Gas Governance Network, founded in 2017, is a non-governmental, non-profit organization, geared towards informing and educating the Guyanese public and advocating for transparency, accountability, and good governance.

(OGGN challenges Exxon to prove adherence to “highest ethical standards”)

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