Guyana Takes Exxon to Court Over Misstated Value of Equipment

image is BloomburgMedia_SCX3HOT0G1KW00_04-05-2024_06-00-10_638503776000000000.jpg

Signage for Exxon Mobil Corp. at the company's booth during the Gastech Exhibition & Conference in Singapore, on Tuesday, Sept. 5, 2023. The conference runs though Sept. 8. Photographer: Nicky Loh/Bloomberg

Guyana’s tax agency is taking Exxon Mobil Corp. to court after one of the company’s suppliers said it mistakenly inflated the value of oil-well equipment by 200 times to about $12 billion.

The Guyana Revenue Authority issued a summons to the oil giant, with a hearing is scheduled for May 10, according to the agency’s Commissioner-General Godfrey Statia.

Exxon and Ramps Logistics, a Trinidad-based company, said the overvaluation stemmed from a clerical error that denoted the sum in US dollars instead of Guyanese dollars. A Guyana dollar is worth about one-half of a US cent. 

The error was “caught early,” and “nobody suffered any loss,” Exxon country manager Alistair Routledge said. The company has updated its procedures to make sure it won’t be repeated, he said.

Under Guyana’s production sharing contract with Exxon, the government only receives its share of production after costs are deducted, making accurate declarations vital to the country’s oil revenue. Exxon recently approved its sixth development that will help double its production capacity to 1.3 million barrels a day by 2027. 

“We are now ensuring that before we finalize the second audit that the GRA will go back and check all the back invoices for the past several years to see that there has been no overstatement,” Guyana Vice President Bharrat Jagdeo said at a new conference Thursday. 

Exxon has agreed to comply with the audit. 

Ramps called the error “unfortunate” and said it would be resolved.

“It was a mistake,” Chief Operating Officer Shaun Rampersad said Friday in an interview. “There were some issues that happened in the system, and it is something that we are committed to working with them on.”

©2024 Bloomberg L.P.

By Denis Chabrol


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