Vice President, Dr. Bharrat Jagdeo disclosed yesterday that ExxonMobil and the Government are at odds over costs which should be deemed recoverable by the Operator.
Dr. Jagdeo said that all the necessary audits of the costs incurred by the Stabroek Block developer have to be rigorously conducted while adding that this activity is still ongoing.
The former Head of State said, “We have to aggressively peruse the costs of the company because so far, they have not completed the audit of a cent of the costs. Even pre-production costs (which stands at US$460M) and the exploration costs up to 2017 are now being audited.”
The Vice President said that there are several opportunities for both sides to agree or disagree with costs. “But we see some areas where we don’t believe that expenditures that are made now as part of cost oil should be part of cost oil,” the official noted. He did not disclose further details on the recoverable costs the government is not in agreement with.
As for the Stabroek Block Production Sharing Agreement (PSA), the Operator and its joint venture partners, Hess Corporation and CNOOC/NEXEN have very little restrictions on what it can claim as recoverable costs. Even costs it expends on legal representation as well as fines for environmental infractions can be reclaimed.