Guyana's failure to complete first oil audit exposes govt.'s inability to scrutinise Exxon's multi-billion-dollar expenses

Guyana’s failure to complete first oil audit exposes govt.’s inability to scrutinise Exxon’s multi-billion-dollar expenses — IEEFA

Jul 18, 2026 News

…Report warns country’s interests are not being protected

(Kaieteur News) – Guyana has yet to complete its first audit of ExxonMobil’s expenses for the 1999–2017 period — a gap the Institute for Energy Economics and Financial Analysis (IEEFA) has flagged since 2021 as clear evidence that the government lacks the capacity to properly assess the company’s claims. Roughly US$1.6 billion in costs Guyana is obligated to reimburse for exploration activities in the Stabroek Block, is at stake.

Tom Sanzillo, IEEFA’s Director of Financial Analysis, said the unfinished audit points to a deeper problem than a missed deadline. “The inability to complete an audit of costs that were incurred more than 20 years ago demonstrates that the Guyanese government is not capable of assessing a claim for payment,” he said. “The implications go far beyond the audit and affect the ability of Guyana to protect its interests.”

The initial audit was carried out by IHS-Markit, a British consulting firm. The team identified US$214 million in costs it said had been wrongfully added to the cost bank expenses Guyana would otherwise absorb through reduced future revenue and recommended the government pursue recovery of that sum.

IEEFA’s report frames the stalled audit as a symptom of weak project management within government, arguing that stronger oversight capacity is essential if Guyana is to hold its own over the life of the agreement with ExxonMobil.

The consequences of inaction are significant. IEEFA warned that failing to resolve the 1999–2017 audit leaves Guyana exposed to accepting the contractor’s back claims in full. Should the government continue to delay, the report noted, ExxonMobil retains the right to pursue the matter through litigation.

The Institute urged Guyana to move quickly to build a professional team capable of representing its interests in cost recovery disputes. “Although the government is in the process of assembling such a team through a contract process, the competency issue remains outstanding,” the report said. It also recommended greater transparency from both sides: “It is plain that both the contractor and the government possess more information that would clarify the actual business arrangement between the government and the contractor.”

Government and ExxonMobil have not reached agreement on the original audit findings. As a result, both parties are now seeking to appoint a sole expert to resolve the dispute, a mechanism built into the 2016 Production Sharing Agreement (PSA). If the expert determines the disputed costs were improperly charged, Exxon will be required to credit the amount back to the cost bank.

Under Article 26 of the PSA, if the parties cannot agree on a sole expert within 30 days, the International Chamber of Commerce (ICC) will appoint one under its Rules for the Appointment of Experts and Neutrals. Article 26.10 further requires that “the Parties shall cooperate fully in the expeditious conduct of such expert determination and provide the expert with access to all facilities, books, records, documents, information and personnel necessary to make a fully informed decision in an expeditious manner.” The expert is expected to render an opinion within 30 days of appointment, and no later than 60 days.

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Exxon, Guyana's failure, IEEFA, oil audit

One thought on “Guyana’s failure to complete first oil audit exposes govt.’s inability to scrutinise Exxon’s multi-billion-dollar expenses — IEEFA”

Mike Thomas July 18, 2026 at 9:41 am

I would leave my oil in the ground. To hell with Exxon.

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