Audits raise $279M in disputed oil costs, third report under review

After raising concerns over more than US$279 million in oil expenses claimed by ExxonMobil and its partners following audits of the Stabroek Block, the government is reviewing a third report covering more recent costs, the Ministry of Natural Resources said on Wednesday.

The audits, part of Guyana’s cost recovery verification process under its petroleum agreement with ExxonMobil, Hess, and CNOOC, cover oil operations between 1999 and 2023.

The first audit, conducted by IHS Markit, examined expenses from 1999 to 2017 and led to the government disputing approximately US$214 million in submitted costs. The parties have agreed to initiate a sole expert determination process, as outlined in the Production Sharing Agreement, to resolve the disagreement. The government has submitted several nominees, and Exxon, acting on behalf of the co-venturers, has until May 31, 2025, to respond.

A second audit reviewed US$7.2 billion in declared expenses for the period 2018 to 2020. The government did not accept US$65.1 million of those costs and is now reviewing updated submissions from the companies.

The third audit, covering 2021 to 2023, has been completed and submitted. The Guyana Revenue Authority, which plays a key role in the audit process, is currently reviewing the initial report.

The final reports for the first and second audits are available on the Petroleum Management Programme’s website (http://petroleum.gov.gy/), the ministry said.

The Ministry of Natural Resources reaffirmed its commitment to the prudent management of the oil and gas sector and said it would continue to keep the public informed.