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Four Years later… Govt. and Exxon still can’t agree on expert to resolve US$214M audit dispute
(Kaieteur News) – Four years after a British audit flagged US$214 million in questionable oil expenses, the Government of Guyana (GoG) and ExxonMobil Guyana Limited (EMGL) remain deadlocked, unable to agree on a “sole expert” to settle the dispute.
EMGL President, Alistair Routledge
The revelation came from Exxon’s President, Alistair Routledge, who confirmed that discussions with the Guyana Revenue Authority (GRA) are still ongoing to identify a mutually acceptable expert to review the contested claims.
IHS-Markit, which reviewed some US$1.6B in expenses for Exxon advised the GoG that some US$214M was not billed correctly by the operator during the period 1999 to 2017.
Although Exxon reportedly supplied documents to the GRA to substantiate the expenditure, the tax agency did not budge on the figure. As such, the parties have moved to engage a sole expert to settle the dispute, in keeping with the terms of the 2016 Production Sharing Agreement (PSA).
Article 26.1 of the agreement states, “The Parties shall make reasonable efforts to resolve amicably all disputes by negotiation. A notice of the existence of a dispute shall be given by a Party to another Party…in the event that no agreement is reached within sixty (60) days after the date on which a Party notifies the other that a Dispute exists, or such longer period as specifically agreed by the Parties in writing, any Party shall have the right to have such dispute determined by arbitration as provided for in this Article 26, Notwithstanding the above, such period of negotiation is not required where the running of this time period may bar access to arbitration.”
According to the President of EMGL, “We have been working with the GRA on identifying a sole expert with whom both parties are comfortable. That is a process that takes a little bit of time, partly because it’s the first time we’ve done this together.”
Natural Resources Minister, Vickram Bharrat
He added, “You know everything you do for the first time, you go through a learning process but also, you know, it’s not unusual for that to take time. Most sides have a view of, you know, who might be a suitable sole expert, you know, we made proposals to one another, we simply review those, and then we have further discussion. I think we are getting close.”
To this end, Routledge noted that to his knowledge, there have been no finalization of a suitable sole expert to review the claims. The Exxon President noted that the company is striving to give confidence that its expenditure was genuine and appropriate to underscore prudent management of the investments being made in Guyana.
Further, he pointed out that Exxon was perhaps “the most audited organization in the country” since the company is not just subjected to internal audits but expenditure review by its co-venturers and external audits by the GoG. “So we’re very rigorously audited. We take the accounting side and the diligence of making sure that we spend wisely as extremely important, because ultimately we’re aligned, it’s about maximizing the value and maximizing the economic recovery of resources in the country. We’re actually very, very aligned in our mission to do that,” he urged. Notably, IHS completed its audit of the company and submitted a revised report to the GoG since March 2021. This means that the audit is now in its fourth year since the report was handed over.
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