EITI flags Guyana’s failure to complete cost oil audits

Mar 14, 2025 News

Kaieteur News- The Extractive Industries Transparency Initiative (EITI) has highlighted Guyana’s failure to complete any of the two cost oil audits conducted to date.

Chief Policymaker for the Petroleum Sector, Vice President Bharrat Jagdeo

In its latest Report for the year 2022, the transparency watchdog explained that the EITI Standard states, “implementing countries are expected to disclose final cost and tax audit reports, or summaries of those reports, including costs deemed as non-recoverable and costs deemed non-deductible and any additional revenues to be collected as a result”.

In keeping with the terms of the 2016 Production Sharing Agreement (PSA), costs deducted by ExxonMobil Guyana Limited (EMGL) are subject to an audit by the Government of Guyana (GoG). Consequently, the document notes, “At the date of this report, two such audits have been carried out by separate teams, but agreement has not been reached on any potential adjustments to be made.”

Guyana’s first cost oil audit was conducted by a British firm, IHS-Markit, and reviewed some US$1.4B in expenses incurred by the oil giant between the period 1999- 2017. The final report for that audit was first leaked to the media and subsequently released by the GoG. It concluded that some US$214M of the costs being claimed by Exxon were questionable and therefore recommended that government challenges the amount. Despite the report being revised and handed over to government since March 2021, that process has not concluded. The government had said it stands by the findings of the audit firm and expressed its intention to challenge same through arbitration but there has been no move in that direction to date.

Meanwhile, the second audit was conducted by a local consortium, VHE Consulting for the period 2018- 2020. The team reviewed approximately US$7.3B in costs submitted by the contractor and found over US$70M in questionable sums. The final report for that audit has not yet been released to the public as suspicions grow over the sum flagged by the auditors.

In the meantime, the contract for a third audit was awarded to VHE back in October last year and is expected to be completed this month. The consortium is tasked with reviewing a massive US$19.6B in expenditure racked up by ExxonMobil over the period 2021-2023.

Notably, the Petroleum Agreement between the GoG and the ExxonMobil-led consortium allows the group to recover 75% of the oil produced to cover costs, while the remaining 25% is shared as profit between the oil companies and Guyana. These audits are therefore crucial to ensure the country was not cheated out of its rightful share of profits.

(EITI flags Guyana’s failure to complete cost oil audits)

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Audit, complete, cost, EITI, ExxonMobil

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