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Auditors given 5 months to audit Exxon’s US$19.6B expenditure
…biggest cost recovery bill to date
By Renay Sambach
Kaieteur News- By March 2025, a team of local auditors, supported by international experts, is expected to complete the cost recovery audit of ExxonMobil Guyana Limited’s US$19.6 billion in expenses, accumulated over three years and set to be recovered from revenues generated in the Stabroek Block.
The third audit of Exxon’s Stabroek Block expenses is being conducted by local consultants VHE Consulting and Martindale Consultants, with additional support from petroleum geologists from the Norwegian technical firm IKM Acona AS.
Flashback! Minister of Natural Resources, Vickram Bharrat, handing over the contract to VHE Consulting auditors to conduct the second audit in the presence of Permanent Secretary of the Ministry of Natural Resources, Joslyn McKenzie (DPI photo)
Permanent Secretary (PS) of the Ministry of Natural Resources, Joslyn McKenzie, during the Ministry’s end-of-year press conference on Tuesday disclosed the auditors were allotted five months to complete the third audit of Exxon’s expenses. The contract to audit Exxon’s expenses for the period 2021 to 2023 was awarded on October 10, 2024 for the cost of $312 million.
McKenzie said, “That’s the period 2021-2023, and the audit sum totals roughly about US$19.6 billion thereabouts. This is the quantum spent for the three years right, and that audit commenced in November of 2024 and is expected to be completed by March of 2025.” He noted that the auditors have commenced field activities. He also outlined that the petroleum geologists are doing the technical aspect of the audit.
Permanent Secretary (PS) of the Ministry of Natural Resources, Joslyn McKenzie at the press conference on Tuesday
In accordance to the Stabroek Block Production Sharing Agreement (PSA) ExxonMobil, the operator of the Stabroek Block, and its partners Hess and CNOOC are allowed to recover 75% from the sale of oil to cover cost, before the remaining 25% is shared as profit between the oil companies and Guyana. As such, the audit of the expenses recoverable by oil companies is crucial to ascertain if actual recoverable cost is being billed to the cost bank.
When asked if the government is comfortable with the short timeline given to auditors to review a substantial US$19.6 billion in expenses which is significantly larger than the two previous audits, McKenzie responded, “As it relates to the duration, the duration is in keeping with the audit charter, and the GRA ensured us that the work will be completed within that timeframe. All the bidders who submitted their bids also said the same thing, that the timeframe is adequate.”
The earlier audits include British firm IHS Markit, which reviewed expenses totaling US$1.7 billion for the period 1999 to 2017, and VHE Consulting, supported by SGS and Martindale Consultants, which audited US$7.3 billion for 2018 to 2020.
The Permanent Secretary also noted that the Guyana Revenue Authority is leading the audit with the Ministry of Natural Resources providing technical and regulatory support. He added, “Once we get to the stage where the report is submitted by the end of March, the GRA will advise the Minister in relation to that.”
“The auditors have already submitted the entry and the inception reports and their entry documents to the Guyana Revenue Authority. There’s been technical working sessions with the GRA and the auditors, along with Exxon, who’s been providing all the necessary documents. There is full cooperation on the part of Exxon, and so far, everything is going smooth,” McKenzie disclosed. Further, he outlined ongoing capacity-building initiatives tied to the audit for members of the Ministry of Natural Resources, GRA, the Audit Office, Ministry of Finance, Bureau of Statistics, and others.
(Auditors given 5 months to audit Exxon’s US$19.6B expenditure)
- ExxonMobil Guyana Limited’s, Martindale Consultants, petroleum geologists, Stabroek Block, VHE Consulting
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