Guyana's tax agency will begin dispute resolution with Exxon regarding expenses

The Natural Resources Ministry of Guyana has instructed the country's Tax Agency to start a dispute resolution process with Exxon Mobil regarding the recovery from the U.S. Oil Major, about $214 million worth of expenses.

Exxon's expenses as part of operations on the Stabroek block offshore are closely watched because a consortium headed by the U.S. giant can export up to 75 percent of the crude oil it produces under the name "cost oil", whereas Guyana is entitled to the other half.

The government followed the mechanisms in the contract that were included to have expenses audited and verified by an external consultant firm.

The government reviewed the audit conducted by U.S.-based IHS Markit, which covered expenses from 1999 to 2017.

The Guyana Revenue Authority gave the Ministry a "no objection" to IHS's recommendation to adjust cost bank by $214.4 millions. The ministry stated that this position is unchanged and unambiguous, and Exxon has been informed of it.

Exxon didn't immediately respond to a comment request.

Bharrat Jagdeo told the media last week that by the end of January the Exxon-led group, which controls the entire oil and gas production in Guyana had recovered $33.9billion of the $41.1billion spent in the region.

The ministry confirmed that a second audit, ordered by the government, is ongoing. It said Exxon responded to its initial findings, and VHE will now review the response. (Reporting and writing by Kemol King; editing by Chris Reese, Nis Williams, and Marianna Pararaga)

(source: Reuters)