Govt. must set itself apart from financial skullduggery by Stabroek Block partners -Install competent people to regulate sector –Chris Ram

Jul 05, 2021 News

Kaieteur News- After reviewing the 2020 financial statements of Stabroek Block partners, namely, ExxonMobil’s subsidiary Esso Exploration and Production Guyana Limited (EEPGL), Hess Guyana Exploration Limited (Hess), and CNOOC Petroleum Guyana Limited, Chartered Accountant and Attorney-at-Law, Christopher Ram firmly asserts that there are serious deficiencies in those documents which leave Guyana at risk of wanton abuse and manipulation.
In his most recent writings, Ram concluded that the documents are so ambiguous in the details they present that it is virtually not possible to have a holistic picture understanding of how expenses are being charged against the Liza Phase One Project.

Chartered Accountant, Chris Ram

In light of this, Ram said it is critical that the PPP/C Government separate itself as a partner in the financial shenanigans being perpetuated by the companies by introducing modern oil laws, appointing independent and competent regulators, and ensuring that the nation’s rules and regulations governing the sector are respected.
Ram was keen to note that the financial statements for each of the Stabroek Block partners do not disclose, in sufficient detail, how they are accounting for the use of money from the Liza Phase One Project. He also expressed fear over some of the expenses that are being charged against the project which are completely unrelated to it.
He said too that both the principles underlying the preparation and contents of the financial statements reflect major deficiencies including noncompliance with accounting standards, and requirements of the law and the Stabroek Block Production Sharing Agreement (PSA). He said too that reconciling the statements in question and the requirements of the PSA or even with the nation’s tax laws would prove to be a challenging task for those concerned.
Significantly, Ram highlighted that Guyana’s laws require the financial statements of external companies (and not just of their Guyana branch which is what has been presented) along with their annual returns to be filed at the Commercial Registry. He noted that the Stabroek Block partners have been non-compliant in this regard while adding that the Registrar of Companies was generous, if not careless, in permitting this.
He went on to note that these financial statements have vindicated the initial fears he expressed about the limitations and weaknesses of the 2016 Petroleum Agreement. The Chartered Accountant said, “Those limitations and weaknesses have been compounded by the multitude of combined fatal deficiencies by the three oil companies in their financial reporting in the first year of oil production, averaging less than 100,000 barrels of oil per day.” Ram said it is clear that the opportunities for manipulation will increase correspondingly as production increases by eight and tenfold.
It was at this point that he said, “It is incumbent on this Administration to separate itself as a partner in the financial shenanigans being perpetrated by the companies, introduce modern petroleum legislation, appoint independent and competent regulators and ensure that our laws are respected.”
The lawyer concluded, “The Government should expect resolute pushback. The oil companies do not comply with a weak Agreement partly written by them, let alone a regime of regulations meeting international standards.”