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Opposition to grill Govt. on audits of Exxon’s billion-dollar expenses
Kaieteur News – Opposition Member of Parliament (MP) David Patterson has submitted several questions to the National Assembly, seeking answers from the government on ExxonMobil’s outstanding audits, dating back to 2017.
Opposition MP: David Patterson
The queries have already been approved by the House Speaker, Manzoor Nazir, and published on the Notice Paper. The National Assembly will meet on Monday next week. Patterson has so far asked that the Minister of Natural Resources, Vickram Bharrat, say whether his ministry has approached ExxonMobil for an extension of the deadline to facilitate the auditing of the company’s US$ 9B expenses, and if so, the MP has also requested that the minister provide the House with documents including the response from Exxon.
Bharrat will also be required to respond to Patterson whether the Tender Evaluation for the Auditors of ExxonMobil’s post 2017 expenses which totaled approximately US $9 billion has been discontinued and if affirmed, provide details concerning who ordered the discontinuation of the evaluation process.
Furthermore, the Opposition MP has asked that Bharrat enlighten Parliament on whether the National Procurement and Tender Administration Board (NPTAB) was informed as to the reasons why the evaluation process was discontinued. If the minister answers in the affirmative, Patterson is requesting that he provides Parliament with copies of the correspondences.
When it comes to the pre-contract costs for Exxon, Patterson has asked Minister Bharrat to confirm whether the audit of the $460 million expenses was completed. He has also requested a copy of the Audit Report, if the verifications were carried out. With regard to the Budget 2021 allocations to conduct audits of ExxonMobil’s post 2017 expenses, Patterson who is also Shadow Oil and Gas Minister has submitted for the minister to confirm that Budget 2021 includes allocations for the costs to facilitate audits on the company’s expenses. If monies were allocated, he has asked that Bharrat enlighten the Parliament on the sum.
And finally, the Opposition MP requested that the Natural Resources Minister provide the names of all persons, firms and companies that submitted bids to perform the audit of Exxon’s post 2017 expenses, as well as state specific reasons as to why none were successful.
Minister of Natural Resources, Vickram Bharrat
Due to the nation’s failure to conduct 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. Both initiatives total approximately US$9.5B.
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 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.
Under the Production Sharing Agreement (PSA) inked with EEPGL—ExxonMobil—and their partners, the Guyana Government has up to two years to audit and query the spending had by the US oil major, failing which, the bills would have to be paid, as is.
Oxfam America, a confederation of 20 charitable organisations which seek to fight poor governance of extractive wealth, has said that the expiration periods for audit rights are set out in petroleum contracts and tax laws. It stressed, however, that these deadlines differ from one country to the next.
It noted that in Ghana and Kenya for example, the authorities there retain the right to complete auditing companies within seven years. In Peru, the time limit for audits is a minimum of four years. Even in the USA, the transparency body highlighted that audits are allowed to be completed within a minimum of three years.
Oxfam warned however, that even a three-year deadline is not advisable for developing countries such as Guyana, given the limited financial and human resources that are likely to delay the audit process.
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