Great risk lies in accurately assessing true market value of Guyana’s oil - GRA boss

Great risk lies in accurately assessing true market value of Guyana’s oil – GRA boss

May 02, 2018 News

– Says entity will be as vigilant as possible

Commissioner General of the Guyana Revenue Authority (GRA), Godfrey Statia said that his entity will have to toil to ensure that Guyana is not cheated out of its rightful revenues from the oil industry.

GRA Commissioner General, Godfrey Statia

Statia said this at an informative session on oil and gas for private sector members held by the Consultative Association of Guyanese Industry (CAGI) at the Marriott Hotel.
The Commissioner covered a wide range of issues that can affect Guyana both negatively and positively. He said however, that in order for Guyana to enjoy the sweet of the industry, GRA will have to bring its “A-game”.
On the revenue side, Staita said that “accurate reporting of the components of gross revenue; volume of production and sale price (value) of production would have to be safeguarded.”
The Commissioner said that the true assessment of the volume of oil is a less contentious issue, as the methodologies for measurement of such are globally accepted. He said that the greater risk lies in accurately assessing the true market value of oil “especially when such a sale takes place between affiliated companies.
Statia said that when the sale is between unrelated third parties, market values are easier discerned through international benchmarks after considering crude quality, upliftment and production methods.”
Further, Statia said that oil companies’ ability to move revenues and shift costs between countries has become common.
“Complex corporate structures are adopted by many multinational companies, often using a conduit company/subsidiary, incorporated in a low tax or tax haven jurisdiction, as part of the chain of ownership leading to the main operator in the host country.”
Realizing that GRA lacks the capacity to fully scrutinize the oil industry, Statia said that international assistance has been sought. He said that this continues to be the case, as Guyana seeks to learn from the experiences of other countries and understand the financial, technical and socio-economic challenges that emanate from the oil industry.
Statia said that GRA has reached out to the International Monetary Fund (IMF), World Bank, Commonwealth Secretariat, United Kingdom and Trinidad and Tobago, for training and secondment/attachments in this regard.

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