Guyana Takes Exxon to Court

BATS:XOM   Exxon Mobil
Guyana's tax agency is taking Exxon Mobil Corp. ( XOM ) to court after one of the company's suppliers claimed 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 scheduled for May 10. Exxon and Trinidad-based Trinidad-based company Ramps Logistics claimed 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. Exxon ( XOM ) country manager Alistair Routledge said the error was "caught early" and no one suffered any loss. The company has updated its procedures to prevent repeating the error. Under Guyana's production sharing contract with Exxon, the government only receives its share of production after costs are deducted. Exxon ( XOM ) recently approved its sixth development which will help double its production capacity to 1.3 million barrels a day by 2027. The company has agreed to comply with the audit.

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