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Ongoing audit will inform nation of amount deducted by Exxon so far to restore environment- Minister Bharrat
Kaieteur News-The decommissioning monies taken out from Guyana’s oil profits will be revealed upon the completion of ongoing US$19.6B audit of American oil major, ExxonMobil.
This was related to the National Assembly by Minister of Natural Resources, Vickram Bharrat during the Consideration of Estimates for the 2025 Budget.
Minister of Natural Resources, Vickram Bharrat
During the Committee of Supply, Opposition Member of Parliament (MP), Shurwayne Holder asked for an update on how much has been withdrawn to date by the company for decommissioning activities. Decommissioning refers to the clean up and restoration of the environment, following the life of an oil project. It involves the removal of risers and flowlines and other equipment used during the production of oil.
In his response to the query by MP Holder, Minister Bharrat informed the House that the information will be made known in the ongoing review of the company’s expenses.
He said, “That will be part of the audit that is being done. The decommissioning fund is something that was introduced in the Petroleum Activities Act. There was no decommissioning fund before the Petroleum Activities Act and the Petroleum Activities Act was passed in 2023.”
Bharrat pointed out that, “There is none of those new developments- I think its Uaru and Whiptail that has started to produce as yet, so with regards to the information that the honourable member is requesting, that would be part of the audit.”
The third audit of Exxon’s Stabroek Block expenses is being conducted by local consultants VHE Consulting and Martindale Consultants, with additional support from petroleum geologists from the Norwegian technical firm IKM Acona AS.
By March 2025, the team is expected to complete the cost recovery audit of US$19.6 billion, accumulated over three years and set to be recovered from revenues generated in the Stabroek Block.
During his first press conference of the year, Vice President, Bharrat Jagdeo said that the decommissioning fund for future oil projects will be managed by both Guyana and Exxon, as the long-term goal of the government is to get the funds previously deducted into the same account.
The Chief Policymaker for the sector was at the time addressing a question from this publication on how government would ensure the cost of decommissioning is left as a burden on Guyana.
To this end, Jagdeo said while the decommissioning costs can be speculated, he does not want to do that, however he disclosed that in the previous agreement by the APNU administration the monies for decommissioning were being kept by the investors. “So, they have been deducting money and keeping it in that account that they said they have,” he said.
He added, “We know what the sums are they and I think that was given some time in the past. I can’t remember what it is now. But what did we do? The same way, we changed the PSA and effectively renegotiated the other contracts outside the Stabroek Block, we passed a new Act, and the act now says, if you have the decommissioning cost, you have to keep it in an account held jointly between the government and the oil and gas companies.”
Jagdeo explained that the last permit government issued, ExxonMobil is now required to deposit the decommissioning cost of the project once it begins, into the account. He said he is hopeful that all of the monies the company had been holding for decommissioning for the current producing projects will be able to be added to the account.
(Ongoing audit will inform nation of amount deducted by Exxon so far to restore environment- Minister Bharrat)
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