Opposition submits motion demanding reasons for Govt.’s failure to audit US$9B oil expenses

Nov 17, 2021 News

Kaieteur News – The Opposition’s Shadow Minister for the oil sector, David Patterson, has submitted a motion to Parliament which calls on Natural Resources Minister, Vickram Bharrat to explain the government’s failure to audit US$9B in expenses incurred by ExxonMobil on the Stabroek Block.In the motion seen by Kaieteur News, Patterson wants the Minister to confirm if an audit of ExxonMobil’s pre-contract costs totaling US$460M up to 2015 has been completed. If he answers in the affirmative, Patterson wants the Minister to provide a copy of the document to the National Assembly.

Opposition Shadow Minister for Oil Sector, David Patterson

Further to this, Patterson has asked the Minister to confirm that Budget 2021 includes allocations for the costs for conducting audits on ExxonMobil’s post-2017 costs and if this is the case, to state the budgeted sums for same.
Apart from the pre-contract cost audit, the parliamentarian wants answers on the government’s failure to audit ExxonMobil’s costs for the Liza Phase One and Liza Phase Two Projects, which total US$9.5B. In this regard, he wants to know the specific reasons for the discontinuation of the tender evaluation for the auditors for that job, as well as for the Minister to name the person, who made the decision to discontinue the evaluation process.
Further to this, he called on Minister Bharrat to say if the National Procurement and Tender Administration Board (NPTAB) was informed of the reasons why the evaluation process was discontinued. If this was done, he asked that evidence of same be provided.
Finally, the Opposition’s Shadow Minister asked that the names of all the persons, firms and companies who submitted bids to perform the audit of the Liza Phase One and Two costs be provided along with the specific reasons why none was successful.
Significantly, Patterson is desirous of knowing if the government has asked ExxonMobil for an extension to audit its US$9B expenses and for documentation on this request to be provided along with a response from ExxonMobil, if this was received.

GUYANA FORCED TO PAY
Kaieteur News had previously reported that due to the government’s failure to conduct the foregoing cost audits within the two-year deadline prescribed in the Stabroek Block Agreement, Guyana has no choice but to allow ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), to recover all stated costs for its Liza Phase One and Two Projects.

Natural Resources Minister, Vickram Bharrat

Vice President, Dr. Bharrat Jagdeo had said that the government is disappointed that it has not been able to push through with these critical post-2017 audits.Expounding further, the Vice President said, “We have been very disappointed that we have not been able to select a group to do the audit of the post-2017 expenditure by Exxon. The reason is that we didn’t have strong local content. We had two groups, two local groups that came in but they were not strong enough. We want to build the capacity in Guyana to do this audit. We think that our people have enormous skills, forensic skills and auditing capacity.”
The former President added, “…we’re looking to see if we can’t have an arrangement where we have a consortium of our local people to come together to do part of this work while working alongside an international group…”
Dr. Jagdeo had said he has since asked the Natural Resources Minister, Vickram Bharrat, to examine the possibilities of getting together, all of the groups from Guyana which have expressed interest in working with a foreign company on this front. He said this is the preferred option, as the country desperately needs to increase its auditing capacity and competencies.
In addition to being able to recover the costs for Liza Phase One and Two, Exxon will also be able to recover without any challenges, the US$460M, which the oil company claimed was expended prior to the signing of the 2016 Production Sharing Agreement (PSA) governing the Stabroek Block. It had said this money was spent on all the exploratory work that was needed for the massive 2015 Liza discovery.
The only costs Guyana stands a chance of auditing and refuting if unreasonable charges are found are those occurring from 2019 onwards. It therefore means that the PPP/C Administration still has ample opportunity to review costs expended for ExxonMobil’s Payara Development Project in the Stabroek Block. This project is expected to cost US$9B.

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