The National Procurement and Tender Administration Board (NPTAB) has awarded a local consortium, VHE Consulting, the contract to conduct the third audit of ExxonMobil’s expenses for the period 2021 to 2023. VHE Consulting is a partnership between Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc.
The contract, valued at GY$312.6 million, was granted on 10 October 2024, according to information published on the NPTAB’s website.This audit is part of a broader project led by the Ministry of Natural Resources, which earlier this year issued a tender for consultancy services to audit and validate the Government of Guyana’s share of profit oil for the stated period.
The tender, first opened in March, saw bids from international and local firms, including Grant Thornton UK LLP, PKF Barcellos Narine & Company, and M. Sukhai & Company in partnership with Info Works Solutions Ltd.The Terms of Reference for the audit require the selected consultant to conduct a pre-audit analysis, design an audit plan with a robust methodology, and execute the audit in compliance with the Stabroek Block Petroleum Agreement, Guyanese law, and international best practices.
The scope of the audit includes verifying crude oil valuations, royalties remitted to the government, and assessing the accuracy of the government’s share of petroleum revenues. The findings will also evaluate the impact of the audit on future profit oil income.This is the third audit undertaken by the Guyanese government. The first, carried out by British firm IHS Markit, reviewed ExxonMobil’s expenses from 1999 to 2017, totalling US$1.7 billion.
That audit resulted in a recommendation that US$214 million be contested by the government. Although this recommendation has been accepted, no steps have yet been taken to recover the disputed sum.Last week, Alistair Routledge, ExxonMobil’s Country Manager, reiterated the company’s position that the dispute over the US$214 million should be settled outside of arbitration.
During a press conference at Exxon’s Georgetown office, Routledge stated that ongoing discussions with the Guyana Revenue Authority aim to resolve the matter without arbitration, which he described as a costly and last-resort option.Meanwhile, Vice President Bharrat Jagdeo has rejected any possibility of a settlement with ExxonMobil over the disputed costs.
At a recent press conference, Jagdeo disclosed that two sets of advisors have recommended that the US$214 million be returned to the cost bank, which would allow Guyana to receive half the amount as profits. He indicated that Exxon’s offer to reduce the sum to US$3 million is unacceptable, and the matter may ultimately proceed to arbitration.
Jagdeo emphasised the need for an independent third party to resolve the issue, stating that any settlement could lead to perceptions of the government yielding to Exxon’s demands.
The second audit, covering the period from 2018 to 2020, was conducted by VHE Consulting, supported by international firms SGS and Martindale Consultants. That contract, worth US$751,000 (GY$156 million), audited expenses totalling US$7.3 billion.
Audits are essential for ensuring that oil companies do not overcharge the government through inflated procurement costs.
Given the terms of Guyana’s oil agreement, Exxon is permitted to deduct up to 75% of monthly revenues to cover its expenses, with the remaining 25% shared as profit between Exxon and the government. Without finalising these audits, Guyana cannot contest any illegitimate costs claimed by ExxonMobil.
