GRA rules out adjusting ExxonMobil’s audited US$214 million

Last Updated on Wednesday, 18 October 2023, 9:33 by Denis Chabrol

The Guyana Revenue Authority (GRA) on Wednesday definitively ruled out any possibility of the US$214 million in disputed audited costs for expenses incurred from 1999 to 2017 being changed, leaving the door open now for the company to move to arbitration. 

“The Authority wishes to categorically re-iterate that it stands by its advice to the Ministry of Natural Resources and the Government of Guyana that the Cost Bank Adjustment of US$214.4M as reported in the “Audit Report Recommendation Final” by IHS Markit is the accepted final figure,” GRA’s Commissioner General Godfrey Statia said.

The overall amount spent on exploration in the Stabroek Block from 1999 to 2017 totals US$1.6 billion. If the company accepts that the US$214 million should not be calculated as cost oil, it means that Guyana will be entitled to 50 percent or US$107 million and the remainder goes to the co-venturers ExxonMobil, Hess and China National Overseas Oil Company.

He made known the Guyana government’s position a day after the Chief Executive Officer of ExxonMobil Guyana Limited, Alistair Routledge said it has reengaged the auditing firm, IHS Markit, to prove that as much as 90 percent of the US$214 million could be accounted for based on its now stacked away 20-year-old records.

Guyana’s tax chief, noting several statements in the media about the Cost Oil Audit, said the GRA unequivocally states that its correspondence to IHS Markit seeking clarity to that “Audit Report Recommendation Final” and copied to ExxonMobil Guyana Limited should in “no way or form” be construed as a change in the Authority’s position that the Cost Bank Adjustment of US$214.4M be adjusted, nor to re-open the process as intimated by the CEO of ExxonMobil Guyana Limited.

Mr Routledge also on Wednesday said that the reduction of the cost to US$3 million during engagements with the Ministry of Natural Resources’ Senior Petroleum Coordinator Gopnauth ‘Bobby’ Gossai was not a formal agreement and that it would forge ahead with the GRA as a the contact point.

At Wednesday’s news conference, Mr Routledge said the company would prefer to avoid arbitration.

The Production Sharing Agreement provides for arbitration or negotiation but sources said the Ministry of Natural Resources appeared to have scuttled any chance of a negotiated settlement.