Liza 1 and Liza 2 audit findings should be made public

Liza 1 and Liza 2 audit findings should be made public – Ram

Nov 21, 2021 News

Liza 1 and Liza 2 audit findings should be made public – Ram

Kaieteur News – While the government has committed to auditing the US$9.5B Exxon spending, Chartered Accountant and attorney-at-Law, Christopher Ram is asking that the administration takes its efforts a step further and make the findings of the audit into the Liza 1 and Liza 2 oil projects public.

Chartered Accountant and Attorney-at-Law, Christopher Ram.

In an invited comment to this newspaper, Ram noted that it would be in the best interest of Guyana to have the details of the expenditure in the open. He noted that US$9.5B is too huge a bill for the country to foot without even knowing what it is paying for.
Further, the Chartered Accountant said that when the details of the audit are exposed then Guyana will be better able to track the spending for future projects.
“It’s all in the interest of good governance. At this point I think the President and the Vice President should be taken at their word that the audits will be done. Hopefully, it gets done as soon as possible so if there are adjustments to the spending, for instance, if any incorrect costs are allocated we can make the appropriate adjustments,” Ram said.
His comments come days after President Irfaan Ali and Vice President (VP), Bharrat Jagdeo made a public commitment to have the huge bill produced by the oil giant for expenditure for the Liza 1 and 2 projects audited.
The commitment by the President and VP came after government was criticised for failing to meet the two-year deadline by which the expenses should have been audited. While it is unclear how the government intends to get the oil giant to agree to such an audit beyond the deadline, Ram noted that the commitment made by the leaders is a good place to start.
“The previous APNU+AFC administration had set the bar low by allowing the oil companies to basically do what they want. But, it would be an act of good faith if this government can get the oil company to agree to audit the expenditure past the deadline. It would also be commendable if the oil companies allow that to happen.”
Earlier this week, VP Jagdeo said that the government will complete the audits of costs claimed by ExxonMobil for its operations, and assured that Guyana’s interests will be protected.
His comment was made in response to concerns that the accounting provisions in ExxonMobil’s Stabroek Block contract stipulate a two-year deadline, and would prevent the government from recovering inflated or unreasonable costs.
The VP had also dismissed criticisms from the political opposition on this matter as self-serving, given that government has been transparent about why it has not yet contracted an auditor.
“We have made it clear what our intention is, to have local people involved,” the VP told DPI on Wednesday.
He said that the government is seeking to assemble a group of Guyanese in the sector who demonstrate strong auditing capabilities in this area, and would be able to collaborate with a reputable international firm for the audit of ExxonMobil’s post-2017 costs.
Government has noted that it is important for a local firm to participate in this audit, in its public calls for expressions of interest.
The government recognises that strong local content achievement is important to the Guyanese people, and its efforts to gather capable local auditors would give effect to that in a practical way. It will also allow them access to considerable revenues from audit fees.
When the PPP/C Government assumed office in 2020, it took over the shepherding of an audit of ExxonMobil’s pre-contract and other pre-2017 costs. The audit was being conducted by the UK firm, IHS Markit, which was hired by the previous administration four years after oil was first discovered offshore.
The VP reminded that cost recovery audits were left outstanding for years. He expressed disappointment that Guyana, under the previous administration, did not develop its capacity to conduct cost recovery audits, nor did it make haste to contract a firm to conduct those audits.
In addition to setting the stage for local audit firms to benefit from involvement in cost recovery audits, the government will also build the capacity of the Guyana Revenue Authority (GRA) to conduct its own cost audits for the oil sector.

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