Oil sector audits

Jan 18, 2021 Editorial

Kaieteur News– Under the current scheme, oil sector audits will take forever to get done, and when that actually comes to a conclusion at some time, it would be so distant and late in the day, as to have little meaning, and less appeal. In view of the amount of money spent, the accompanying paperwork that would be involved, the necessary extended ‘drilling down’ to get to the bottom of things, and the customary back and forth between auditor and auditee, Guyana’s audit of its oil sector could be an unending exercise. This is what concerns us with these audits of oil-related activity and spending, almost all of which this country is responsible for, and must honour.
As we look at what is in place, and take matters a little deeper, we at this paper have no alternative but to say that expectations on audit reports and whatever is embedded in them look like they are going to be yet another engagement with futility, in going through the motions, for the purpose of registering that something is done and nothing else. The audit outlook at this time must be called for what it is: it is grim and leads nowhere. Exxon and its partners will see to that, for they have been in this game for over a century now, so they know what to present, what to paper over, and what to pretend is in order, even when many such matters are not. No one – no individual, no company, no group or agency – functions in a business and environment for over a hundred years and ends up learning nothing.
This is what Guyana faces, as it stares at bills that would sink the Titanic, or stall a Hercules C-130 cargo aircraft on the ground, since there is so much weight involved. Kaieteur News in its January 13th edition noted how this country is going about overseeing its oil business, “Only 10 GRA officers auditing Guyana’s billion-dollar oil sector.” We say it right off the bat: 10 officers are not enough, and this is with due regard for their training and accumulated skills. Here is why this is our position, some of which was incorporated in the article referenced, and the rest of which is basic commonsense.
Currently, there is in excess of US$6B in oil related expenses to check and analyze and review and arrive at reasonable conclusions. To place this on a domestic footing, that US$6B is the equivalent of approximately twelve hundred billion Guyana dollars. However, this is approached and examined, it has to be a high mountain of paper to be sifted through, to be looked at, not by any impractical piece by piece of paper, but by some reassuring sampling methodology, some representative aspect of the population of invoices and prices. We would expect that a significant portion of these invoices and prices to have been executed with American businesses and those from other countries. This alone places our local audit team at a disadvantage, with regard to any cross-checking and robust follow-up to ascertain the integrity of what is submitted by Exxon and its peoples.
Further, when we consider that the audit team from the GRA is made up of 10 officers, this just made a burdensome job assume all the characteristics of the largely undoable. We say this because of what has to be the sheer volume involved in what would be an uphill task, under normal circumstances, for a billion US dollars (GY$200B), but here we are talking about US$6B, and with more coming on a daily basis, since activities are ongoing and not at a standstill. It is our thinking at this paper that 10 officers only permit skimming the surface and probing at the edges, if that. This team has its work cut out for it, and one has to wonder how far it would-or could-get, given the limited number of auditors set aside for this vast and sensitive task.
We in this society do well to remember always that we are responsible for those billions of dollars in expenses incurred by Exxon. Up to this time, the company has not dealt with us in a manner that speaks to open and balanced partnership. With US$6B at stake, and which Exxon desires to pawn off all of it on us, we cannot afford to be complacent, or take this lightly. Yet, from all indications, this is precisely how we are going about things, with the results now almost foregone. It is that the US$6B is owned by us Guyanese.

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Oil sector audits

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