Audit report of ExxonMobil’s US$7.3 billion expenses to be ready in March

Last Updated on Thursday, 2 February 2023, 6:38 by Denis Chabrol

Mr Vickram Bharrat

The report on how ExxonMobil spent  US$7.3 billion in Guyana is expected to be finished in March and would likely be tabled in the National Assembly, Minister of Natural Resources Vickram Bharrat told the National Assembly.

Touching on the perceived delay in completing the audit, he said the agreement was for VHE Consulting to finish the audit in 120 “working days” rather than calendar or “running days”. VHE, a Guyanese consortium is being supported by international firms— SGS and Martindale Consultants for the cost recovery audit between 2018 and 2021 and validation of the Guyana government’s share of profit oil.

Mr Bharrat said the Guyana government would not be paying for the audit as the new production licence now provides for an auditing fee which is paid into a bank account being held by the Guyana Geology and Mines Commission (GGMC).

The Minister explained that the initial audit report was submitted and government was awaiting the second report after which the final report would be due in March 2023. He said the consortium sent back its auditors and accountants to do additional work, resulting in a “slight delay” but not at the expense of building capacity locally so that they could do future audits. He said the reality was that Guyanese accountants could not audit oil and gas expenses. “It’s more of a learning process than a slight delay,” he said.

Separately, a review by the Guyana Revenue Authority (GRA) in 2020 found that there was need to go back and do further work with operator. Since then, he said the final report is being done by the GRA’s Petroleum Unit.

Meanwhile, the 2023 National Budget provides for GY$6.3 million for third party inspection cost for the offloading of crude whenever there is a lift and that amount takes into consideration a third Floating Production, Storage and Offloading vessel. The Natural Resource Ministry has also received GY$42 million to pay for several international subscriptions that would see Guyana saving demurrage costs. Mr Bharrat explained that the latest figures show that Guyana spent GY$98.5 million in demurrage costs by being able to  track vessels and prices through the subscriptions rather than GY$500 million that had been paid before for demurrage.