Latest update May 22nd, 2026 12:38 AM
Govt. demands US$1.2M more from Exxon to help fund audits
…but says hands tied from seeking more for citizens
(Kaieteur News) – Although the government of Guyana (GoG) has often made it clear that it is prohibited from increasing the financial burdens of ExxonMobil and can therefore not seek a renegotiation of the lopsided oil deal, or any additional benefits for citizens, the administration has inserted a provision into a new Licence which will require the company to pay an additional US$1.2 million for the conduct of audits.
Minister of Natural Resources, Vickram Bharrat and ExxonMobil Guyana President, Alistair Routledge at the signing of the Hammerhead Production Licence
The Production Licence (PL) granted to ExxonMobil Guyana Limited (EMGL) for the seventh offshore development, Hammerhead, clearly states that Exxon is required to pay US$400,000 annually for a period of three years to offset cost oil audits.
According to the Licence, the money shall be paid into an account managed by the GoG.
Clause (gg) (ii) of the PL states, “Within thirty (30) days of this Licence and annually on such date thereafter for a total of three (3) consecutive years, the Licence Holder shall pay to an account held and controlled by the Government the sum of four hundred thousand United States Dollars (US$400,000.00) to be used by the Government for the preparation of the audit scope and the procurement of third-party auditors to supplement the Minister’s resources and develop institutional capacity for the ongoing conduct of audits as provided under this paragraph. The Licence Holder shall verify such account and the Minister agrees to cooperate, assist and provide the Licence Holder any information the Licence Holder requires to conduct such verification.”
It is unclear whether the sum to be paid by Exxon will be cost recoverable. Minister of Natural Resources, Vickram Bharrat, up to the time this article was written, did not respond to questions from this newspaper seeking clarity to that end.
Stakeholders have often argued that government can capitalize on these licenses when approving more projects, to seek additional revenue for the people of Guyana.
Government officials have however been reluctant, insisting that the financial burdens of the contractor cannot be increased, in keeping with the terms of the 2016 Production Sharing Agreement (PSA).
The Stability Clause of contract states at 32.2, “After the signing of this Agreement and in conformance with Article 15, the Government shall not increase the economic burdens of Contractor under this Agreement by applying to this Agreement or the operations conducted thereunder any increase of or any new petroleum related fiscal obligation, including, but not limited to, any new taxes whatsoever, any new royalty, duties, fees, charges, value-added tax (VAT) or other imposts.”
Meanwhile, 32.3 of the agreement goes on to point out that should there be any change in the laws which causes an adverse effect on the contractor’s economic benefits, “the Government shall promptly take any and all affirmative actions to restore the lost or impaired economic benefits to Contractor, so that Contractor receives the same economic benefit under the Agreement that it would have received prior to the change in law or its interpretation, application, or implementation.”
Be that as it may, Exxon has agreed to pay the additional revenue over to the state, raising doubts about the “sanctity of contract” and government’s refusal to seek more financial benefits from its resources.
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