Govt. moving to audit Exxon’s 2017-2020 costs - Terms of reference for contract complete

Govt. moving to audit Exxon’s 2017-2020 costs – Terms of reference for contract complete

Feb 22, 2021 News

By Kemol King
Kaieteur News- The Government, according to Vice President, Dr. Bharrat Jagdeo, is moving to award a contract for the audit of ExxonMobil’s claimed recoverable expenses made after 2017. This audit is expected to commence as Government wraps up the US$1.6 billion audit of Exxon’s pre-contract and other costs leading up to 2017.
During a press conference on February 9, last, the Vice President said, “We already prepared the terms of reference for a new contract to be issued, that will have to have local content in it, to do the audit between 2017 and 2020.”

Vice President, Dr. Bharrat Jagdeo

These audits are being done in order to give effect to provisions of the Stabroek Block production sharing agreement (PSA) which allow ExxonMobil and its partners, Hess and CNOOC, to recover expenditures, which go into exploration, development and other petroleum operation.
Dr. Jagdeo had told Kaieteur Radio on December 23 that Guyana currently has in excess of US$6 billion of oil-related expenses to audit from ExxonMobil. Appearing on the show, Guyana’s Oil & You hosted by Senior Journalist, Kiana Wilburg, the Vice President had said, “You’ve had US$8-9 billion of expenditure made so far… Only US$1.6 billion has been audited…”
Last week, he said that though the Department of Energy was doing auditing sequentially, “you don’t need to do it sequentially. You can do it simultaneously.”
The United Kingdom firm, IHS Markit is currently handling the audit of costs leading up to 2017, which include pre-contract expenditures.
The company, according to the Vice President, had submitted a final report to the government, a few days before the August 2020 inauguration of President, Dr. Irfaan Ali. However, the final report was not yet due. The VP had told Kaieteur Radio that the process allows for the submission of three audit reports, but that Markit had skipped the second – the interim report. The administration instructed Markit to convert the “final” report it submitted into a draft report, as it is necessary for the government to review the draft, then send it to ExxonMobil for comments.
Dr. Jagdeo had said that there have already been adverse findings.
“As soon as we get that, then it could go to Exxon for maybe one month, then we can settle that. That doesn’t stop us moving forward from 2017 to now,” the Vice President said.
To ensure audits are done expeditiously, he added that capacity building work is being done at the Guyana Revenue Authority (GRA).
The former David Granger administration had waited years to contract its first audit and reported no progress on building capacity to conduct oil cost audits on its own. It hired Markit late 2019, though the first set of costs had been handed to government since 2016.
“They have to work this year, within GRA,” Jagdeo said, “so that it could be more real-time, like in the same year that the expenditure is made. So that is where we are on the audit.”

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