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By Kiana Wilburg
Kaieteur News – Natural Resources Minister, Vickram Bharrat disclosed to the National Assembly on Monday that under the APNU+AFC regime, limited work was done on the audit of the US$460M pre-contract costs ExxonMobil incurred from 1999 to 2017. The Minister described the extent of the work done as “alarming” while noting that efforts are currently underway to iron out some of the questionable details uncovered with ExxonMobil.
Natural Resources Minister, Vickram Bharrat
The Minister’s response was noted as part of a series of written responses to questions posed by Opposition Member, David Patterson regarding the state of the audit which had commence in 2019 after being awarded to British firm, IHS Markit. The contract cost at that time was US$300,000.
With respect to Patterson’s query about the stage of completion of the US$460M audit, Minister Bharrat said this is still ongoing. He said, “The Government of Guyana, when we took office was alarmed at the limited work done in this regard by the previous administration and immediately commenced with international consultants and local agencies to have a number of shortcomings addressed.”
Minister Bharrat added, “Currently, the government is working to answer every questionable detail with the operator and the auditor to ensure that all expenditures are justifiable and accounted for as per the terms of the agreement.”
He further noted that the government has ensured that the cost of the auditing process is catered for in the 2021 budget which amounted to US$250,000. This would bring the overall costs for the audit of the US$460M bill to US$550,000.
In light of the fact that the Stabroek Block Production Sharing Agreement (PSA) only allows the State a two-year timeline to conduct such audits, Patterson asked the Minister to say if ExxonMobil was approached for an extension.
Minister Bharrat did not state if ExxonMobil was contacted on that issue. However, Bharrat sought to make it clear to the members of the House and the public by extension, that the cost recovery auditing process is a Government of Guyana undertaking.
That said, the politician shared that the administration is in the final stages of completing the first cost recovery audit which covers the period 1999 to 2017. He said this process “was left undone and found wanting by the previous administration.”
Bharrat said the government is now in the process of ensuring the second cost recovery audit process can be commended. It is expected to cover costs incurred by ExxonMobil from 2018 to 2020 in the Stabroek Block.
SECOND COST RECOVERY AUDIT
Last year, Kaieteur News had reported Vice President, Dr. Bharrat Jagdeo as saying that the government was unable to select a group to carry out the audit of ExxonMobil’s post-2017 costs since “strong local content was absent in the bidding process.”
Opposition Parliamentarian, David Patterson
Questioned further on this matter by Patterson was Minister Bharrat. The Opposition Parliamentarian asked the Natural Resources Minister to state the full reasons why the tender evaluation process was quashed, who gave the orders for it to be cancelled, and the list of companies that submitted bids.
Minister Bharrat was keen to note that the PPP/C government did not discontinue any tender evaluation process. “In fact, the procurement process from advertisement to receipt of bids to establishing a panel of evaluators, to having a review of the evaluation process is ongoing. Please allow me to say that this government remains committed to local content development at the national level,” Minister Bharrat said.
He added, “There is little doubt that we have the requisite baseline technical accounting skills to participate in the post-2017 cost recovery audit process, however our local accounting firms are yet to gain experience in conducting a petroleum cost audit exercise, especially of this magnitude. Therefore, this government sees it apt to allow local firms to participate in the cost audit exercise alongside an international firm. This review is ongoing.”
Minister Bharrat declined to share the details on the companies being evaluated until the procurement process is properly completed.
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