Audit of Exxon’s pre-contract costs extended without cost due to COVID-19
The auditing of ExxonMobil’s US$460 million pre-contract costs had to be extended without cost to the auditing firm due to the current COVID-19 restrictions delaying the process, Department of Energy (CE) Director Dr. Mark Bynoe has said.
“This contract is progressing well with a multi-agency team working alongside the consultant, which is IHS Markit. The contract received a no-cost extension because of the impact of the COVID-19 pandemic,” Bynoe told a virtual press conference last week.
Many of our contracts require the consultants to be in country with Guyanese expertise working alongside those consultations. Because of the COVID-19 pandemic and cessation of international flights, our consultants could not return into Guyana to complete aspects of their work so that and that has caused us some delays requiring us to provide them with a no cost suspension,” he added.
In December of last year,
United Kingdom-headquartered IHS Markit was hired by government to undertake the auditing of ExxonMobil’s pre-contract consts and began working alongside the Guyana Revenue Authority (GRA) to complete this task.
The contract cost was pegged at US$300,000.
Bynoe had informed then that the DE and the Guyana Geology and Mines Commission (GGMC) will also be working along closely with the GRA on the project.
GRA Commissioner-General Godfrey Statia had explained that representatives chosen from his agency will “mirror the audit team from IHS Markit in both technical, legal and audit skills,” while GGMC’s Commissioner Newell Dennison assured that “ample and qualified officers” will be represented on the audit team.
The Production Sharing Agreement (PSA) between Guyana and Exxon affiliate Esso Exploration and Production Guyana Limited (EEPGL) and its co-venturers states that the precontract cost “shall include four hundred and sixty million, two hundred and thirty-seven hundred thousand and nine hundred and eighteen United States Dollars (US$460,237,918) in respect of all such costs incurred under the 1999 Petroleum Agreement prior to the year ended 2015.”
It was because the Department of Energy’s Director believed that his country lacks the capacity to audit pre-contract costs for oil recovery that the agency sought international help and had revealed that an international firm would be hired to aid both the GRA and the state audit office to discharge their obligations.
However, government has not decided if the findings of the audit will be made public.