Exxon says US$160M HQ cost only increased by 7%

Mar 15, 2023 News

Kaieteur News – Esso Exploration and Production Guyana Limited (EEPGL) – ExxonMobil Guyana- is claiming that the cost of its Ogle headquarters (HQ), currently under construction, only increased by seven percent since 2019.

In responding to the statements made by the Alliance For Change (AFC) at its Friday press conference, ExxonMobil explained, “The figure quoted (roughly US$50M) only reflected the 2019 projected spend and did not include spends for the subsequent years in what was expected to be a three-year project.”

It noted that the construction cost of the Ogle Operations Center has increased by around seven percent since being funded in 2019, from US$150M for three years to around US$160M currently.

According to Exxon, the increase was triggered by the spike in commodity prices for construction materials and logistics costs.

Additionally, the company said, “There were also additions to the project scope, namely the paving of the access road and culvert/channel crossing, the installation of power transmission lines for GPL, and ground settlement connections.”

The operator pointed out that it must be considered that projections and budget for the project were developed in 2019, which was before the COVID-19 pandemic and associated global supply chain issues.

The AFC’s David Patterson during its weekly press conference told reporters that the cost to construct ExxonMobil’s local Headquarters has jumped from just around US$50 million to US$160 million even though the design for the structure remains the same.

The Shadow Natural Resources Minister in pointing to the need for timely audits to be conducted said the tripling of the project cost is worrying. He told members of the media, “the tender for Exxon’s headquarters was given out before 2020. Since 2018, Exxon indicated that they wanted to build a headquarter…when the contract was awarded, I think in either late 2019 or early 2020, the contract was given out for two buildings which will house 250 persons each…it would support the operations for Exxon for the next 40 years but I myself was amazed to hear that it was US$160 now.”

The former Minister of Public Infrastructure however argued, “In 2020, the project was under US$52 million or thereabout in total. It’s now US$160M. Nothing has changed. They are still building and I checked my records and I found the write up. It’s the same 500 persons that will be housed there. They haven’t added on an extra floor, they haven’t added on an extra building, it’s the same thing and he (Jagdeo) simply allows Exxon to say they are now going to spend US$160 million on a headquarters and he defends it and says the circumstances have changed.”

A contract was awarded to NABI/KCL Oilfield Construction Services Guyana in 2019 for the construction of the HQ at Ogle, East Coast Demerara. According to a Request for Information issued by ExxonMobil Guyana, the scope of works include construction of two buildings for 250 seats; an outdoor pavilion; paving; landscaping; fill and storm drainage; site utilities; plumbing utilities; and electrical works.

The Company – NABI/KCL Oilfield Construction Services Guyana is a Joint Venture of NABI Construction Inc., Guyana and Kee-Chanona Limited, Trinidad.  Patterson argued that the Vice President, Bharrat Jagdeo has jumped to defend the increase in project cost, explaining that circumstances have changed with the company’s operations.

• AFC, cost, ExxonMobil, headquarters, Ogle