In a major climbdown, the government last night accepted that ExxonMobil and partners overstated their expenses for the period 1999 to 2017.
A statement to this effect was issued by the Ministry of Natural Resources at midnight last night, a most unusual time for the issuing of a non-emergency press release.
The ministry’s statement came after Vice President Bharrat Jagdeo had been reported as saying that the US$214m had been reduced to $11m and other sources had suggested that even this figure had been cut to US$3m.
The announcement by the government means that Guyana’s profit line has to be credited by US$107m.
The decision would been seen as a major victory for the country and will add to questions about whether Exxon and partners are overstating expenses. Up to 75% of oil production each year is assigned to cover expenses.
A statement by the Ministry of Natural resources follows:
Statement on audit of ExxonMobil’s expenses
Kingston, Georgetown, Guyana (September 14, 223) The Minister of Natural Resources, Hon. Vickram Bharrat, M.P endorses the position outlined by Hon. Vice President, Dr. Bharrat Jagdeo that the Guyana Revenue Authority (GRA) is the competent authority to lead all audits for expenses incurred by ExxonMobil Guyana Limited and other oil companies.
Like Vice President Jagdeo, the Minister Bharrat stands by GRA’s no-objection to the US$214M in disputed costs flagged by IHS Markit in its audit of ExxonMobil’s US$1.7B in expenses incurred for the period 1999 to 2017.
The Ministry’s Petroleum Unit which is assisting in the audit process had engaged in an unauthorized examination of documents submitted by Exxon. Both the Vice President and Minister Bharrat were under the impression that the information submitted to them on subsequent reductions emanated from the GRA which is not the case.
The Minister wishes to state emphatically that upon learning of this development, corrective action was taken immediately and staff was instructed to cease such engagements and deliberations.
