Executive Summary

IHS Markit (IHSM) has been engaged by the Government of Guyana (GoG) to independently audit the cost recovery claim submission by Esso Exploration and Production Limited (EEPGL) for the period between 1999 and 2017 within the Stabroek Contract Area that amounts to a total of $1,677,774,727 in accordance with the prevailing Production Sharing Agreement(s).

This report provides a summary of the recommendations made in the Audit Report with regards to the validity of expenses submitted by EEPGL for inclusion in the Cost Bank.

The audit terms of reference are to identify expenses that;
 the Audit Team consider have been added in error,
 do not relate to Petroleum Operations, or
 insufficient evidence and transparency have been provided to allow the Audit Team confidence in the validity of the expenses.

Supporting reports providing detailed analysis of the issues raised in this report, the models and all supporting files used throughout the course of this Audit have been shared with GoG and are listed in Section 1.

The Audit has established that GoG has reasonable grounds to dispute $214.4 million plus overhead adjustments of the costs currently included by EEPGL in the Cost Bank. This amount represents 12.8% of the cumulative cost recovery balance as of Q4 2017 Statement…