GRA standing by US$214.4M cost oil figures – Commissioner General

…rules out reopening of process or changing position

The Guyana Revenue Authority (GRA) is sticking to the US$214.4 Million cost oil figures that were flagged during audits of ExxonMobil cost oil claims, notwithstanding them reaching out to Exxon while seeking clarity from the auditor on the findings.
During a press conference on Tuesday, Exxon Mobil Guyana Limited (EMGL) President Alistair Routledge had indicated that GRA reached out to them and there was a request for additional information. This additional information pertains to Exxon’s efforts to reduce the US$214.4 Million flagged by auditor IHS Markit during the cost oil audits for 1999 to 2017.
While Routledge indicated that the audit was still ongoing as they continued to seek a reduction, GRA is sticking to the US$214.4 Million. In a statement on Wednesday, GRA Commissioner General Godfrey Statia maintained that the authority backs the IHS Markit sum. According to Statia, GRA’s request to Exxon for additional documents should not be taken to mean the matter is being reopened.
“The Authority wishes to categorically re-iterate that it stands by its advice to the Ministry of Natural Resources and the Government of Guyana that the Cost Bank Adjustment of US$214.4M as reported in the “Audit Report Recommendation Final” by IHS Markit is the accepted final figure.”
“Further the Authority unequivocally states that its correspondence to IHS Markit seeking clarity to the said “Audit Report Recommendation Final” and copied to EMGL should in “no way or form” be construed as a change in the Authority’s position that the Cost Bank Adjustment of US$214.4M be adjusted, nor to re-open the process as intimated by the CEO of EMGL,” the GRA Commissioner further said.
Arbitration
If both sides are unable to reach an agreement on the final cost oil figure, the matter is then expected to go to arbitration. During the press conference, Routledge had expressed a preference for the figure to be settled on before it reaches the arbitration stage.
“It’s a technical process. Its not a political or management process. It’s a technical process to ensure the right costs are put in the right place and are substantiated by the right documentation. And that’s what we’re pursuing.”
“To ensure the right people who are authorized to review them and sign off on them. It would be a last resort, in my mind the process would have broken down, if we had to go to arbitration,” Routledge explained.
The People’s Progressive Party/Civic (PPP/C) Government had announced that a full probe would be launched into who negotiated for a reduction of the US$214 million sum that was initially flagged in 2019 by British firm IHS Markit when it did an audit of ExxonMobil’s cost oil expenses racked up between 1999 and 2017 from its operations in Guyana.
Following the audit on the cost oil claims, GRA had supported this sum and on August 8, had even written to the Natural Resources Ministry indicating it’s no objection to the US$214 million in cost oil claims that was flagged by the British auditing firm.
However, it was subsequently disclosed last month that staff from the Ministry of Natural Resources’ Petroleum Department had reportedly engaged the US oil company and reduced the US$214 million figure to US$11 million and then subsequently to US$3 million.
At a press conference, Vice President Bharrat Jagdeo had contended that the Government was under the impression that the reduced US$3 million, which he previously disclosed publicly, was determined by GRA – the technical body appointed as its sole advisor to review these audits. (G3)