GUYANA- Government disputes over US$279 million in Stabroek Block oil expenses following cost recovery audits

GEORGETOWN, Guyana, CMC—The Ministry of Natural Resources has issued a comprehensive update on the status of three audits into the expenses claimed by ExxonMobil and its co-venturers in the Stabroek Block. These audits are part of the Government of Guyana’s ongoing cost recovery verification process under the Petroleum Agreement.

The audits, covering 1999 to 2023, were commissioned to ensure that ExxonMobil, Hess, and CNOOC’s declarations of costs for petroleum operations are legitimate and by the provisions outlined in the Production Sharing Agreement.

The first audit, conducted by international consultancy IHS Markit, reviewed expenses incurred between 1999 and 2017. As a result of the audit, the Government of Guyana has disputed approximately US$214 million of the submitted costs.

This dispute has triggered the contractual mechanism of appointing a sole expert to resolve disagreements. By the agreement, the Government has submitted multiple nominees for the role, and ExxonMobil, representing the co-venturers, has until May 31 to respond.

The sole expert process is a binding resolution mechanism outlined in the Production Sharing Agreement. The second audit examined declared expenses totaling US$7.2 billion from 2018 to 2020.

Following the audit, the Government did not accept US$65.1 million in costs. This was communicated to the co-venturers, who have since provided updated documentation. The Government is now reviewing these revised submissions.

The third audit, covering the more recent period from 2021 to 2023, has been completed and submitted to the Government.

The Guyana Revenue Authority (GRA) is reviewing the initial report. The GRA plays a key role in overseeing Guyana’s petroleum sector expenditures.

The Ministry of Natural Resources has reaffirmed its commitment to transparency and the prudent management of Guyana’s natural resources, particularly as the country’s oil and gas sector expands rapidly.

It assured the public that it would continue to provide timely updates on cost recovery audits and other oversight activities.

This multi-phase audit process underscores the Government’sGovernment’s intention to safeguard national interests and ensure that oil revenues are accurately accounted for and fairly distributed.