Guyana still stuck on audit of $460M pre-contract costs owed to ExxonMobil

Nov 07, 2020 News

AS US$ BILLIONS MORE PILE UP POST 2015…

Kaieteur News – In September 2019, the APNU+AFC regime had awarded a contract to a UK firm called IHS Markit to audit US$460M which ExxonMobil said it spent prior to 2015 for exploration works offshore Guyana.
But since the audit started to ascertain of this money Guyana has to repay is inflated, it appears that the nation is still stuck at the stage.
In the meantime, billions of dollars more in other costs incurred after 2015, such as those associated with the development of the Liza Phase One, Phase Two and Payara (the third project on the Stabroek Block) are piling up and awaiting an audit.
Confirming this state of affairs yesterday was Vice President, Dr. Bharrat Jagdeo.
During a press conference that was held yesterday, the official noted that the government is still reviewing the 2015 pre-contract costs while adding that it is still to get around to auditing an additional set of pre-contract costs ExxonMobil said it racked up between January 2016 and October 2016.
The Vice President was not in a position to say how much the second set of pre-contract costs totals.
He noted, however, that the costs for projects that started being developed after 2015 such as Liza One, Two and Payara, will run into approximately US$20B while adding that Guyana needs to keep its eyes on this.
The Vice President stressed, nonetheless, that the government will ensure every cent it has to recover would be accounted for.
US$900M estimate
International lawyer, Melinda Janki, was one of the first persons to note that the country could be neck-deep in as much as US$900M in pre-contract costs. During one of the many panel discussions held on Guyana’s oil contract with ExxonMobil, Janki had reminded that the country has to pay US$460M in pre-contract costs. This covers the period 1999 to 2015. But there is a second lot.
Janki had said that the contract specifically states that Guyana is to pay contract costs from January 2016 to when the deal was signed on October 7, 2016.
The international lawyer had said: “The costs for the whole of 2016 were about US$583M and if you apportion it to October, you get roughly US$400M. Again, (former) Minister of Natural Resources, Raphael Trotman has agreed for Guyana to pay this. As at October 7, 2016, Government’s attempt to sell our oil costs us US$900M. I have found no law which gives the minister the authority to burden the nation with this, so it is quite possible that he acted illegally.” (See link for more details: https://www.facebook.com/jerome.edwards.925/videos/2144978259094356/)

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