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Hire int’l firm to audit ExxonMobil’s pre-contract cost
…offer audit firm percentage of the $$$ we will save – Jagdeo
By Abena Rockcliffe-Campbell
According to Opposition Leader Bharrat Jagdeo, Guyana can avert being duped by ExxonMobil and can secure more revenue if only the government acts just a little wiser.
Jagdeo said that the government can simply hire an experienced international firm to audit ExxonMobil’s pre-contract cost. Anticipating the government saying that it is short on funds to do so, Jagdeo said that Guyana does not even have to commit to paying a particular amount.
He said that the nation can choose to employ a well known mechanism where the firm gets a percentage of the money recovered from a “rigorous audit.”
Jagdeo said this at a press conference he held yesterday.
Former President Bharrat Jagdeo
There, he agreed with statements made by former Advisor to President David Granger, Dr. Jan Mangal, who said that the Guyana Revenue Authority (GRA) should not audit the ExxonMobil pre-contract costs.
Mangal, in a letter to the media, said, “If the Government intends to undertake a rigorous review of the contract costs, this is not the optimal route. Instead, the Government will be taking money from the people of Guyana and handing it to the foreign oil companies.”
Yesterday, Jagdeo said, “I agree; the GRA is not capable and should not be doing this. Why can’t we hire a firm?”
Initially, Jagdeo said that Guyana could have paid the firm US$5M and save another US$10M.
But then he said that it would be even more prudent if the government negotiates even better terms. Jagdeo said that Guyana can “work out a percentage, say every dollar you save us in a rigorous audit, if it is US$100M you get two percent of it or if you save us US$100M through a proper audit you get five percent from it.”
Jagdeo said that under these agreements, Guyana can then afford to choose among the best oil and gas auditing firms in the world.
The former President boasted that that proposition was “just off the top of my head.”
“I did not think of it before. But it makes sense to do that now. Then you do not have any question in the public’s mind or in the media’s mind whether our interest are well served because you know that it is being done by the technical people.”
Jagdeo said that he knows there are good people at GRA and they are “our people, but they are overwhelmed on the tax side. They cannot even do all the audits that they would want to do on companies.”
He continued, “And then you have to have some expertise. If a person said they have this pipeline for US$10 I doubt whether one of our GRA staffers ever saw a pipeline for oil and gas sector or would know whether US$10 is a fair price. But if you have a company that specializes in this, they say no that pipeline can be procured for US$4. How did you procure it? Did you go through a competitive process?”
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