Minister Bharrat mum on US$9B Payara Audit

Mar 31, 2022 News

One month later…

Kaieteur News – Despite time running out on Guyana to conduct the audit into ExxonMobil Corporation (EMC) subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) US$9 billion Payara exploration cost bill – Minister of Natural Resources, Vickram Bharrat, is silent on the government’s progress of auditing and possibly rejecting unreasonable charges if found.
Notably, if the two-year deadline as prescribed in the Stabroek Block Agreement, passes and Guyana fails to audit ExxonMobil’s subsidiary, cost recovery bill, the country has no choice but to allow the oil company to recover US$9B for its Payara Development Project in the Stabroek Block, without making any objection.

Minister of Natural Resources, Vickram Bharrat.

In fact, Guyana has already failed to audit the Liza 1 and Liza 2 [post-2017 audits], which resulted in the oil company being allowed to recover the sum totaling US$9.5B. Therefore, the Payara audit is the country’s only chance of staving off the possibility of having to pay another multi-billion dollar bill from the American oil giant if unreasonable charges are found for those occurring from 2019 onwards.
Due to the seriousness and importance for Guyana to conduct an audit into the pre-contract spending of the oil company, Kaieteur News had first reached out to Minister Bharrat, on February 25, 2022, in relation to the progress of the audit. During the first interaction over a cellphone call, the Minister noted that he was in a meeting at the Office of the President, but contact can be made with him later that day [14:00hrs] for an update. At 14:30hrs, this publication made several calls to the Minister but all went unanswered.
As such, Kaieteur News then contacted Minister Bharrat via WhatsApp. That message read, “Good afternoon Minister Bharrat, this is [name provided], a reporter with Kaieteur News. I contacted you earlier in relation to an update on the auditing of the US$9B Payara project. Is the update available?”
The Minister responded shortly after stating: “Will ask my PR people to do a short release.” Kaieteur News then responded to the Minister by inquiring if the press statement will be released on that date. However, the Minister did not confirm or deny if the statement will be available on that date but replied, “working on it,” and Kaieteur News responded “okay thank you.”
However, on that day, no press release on the audit was provided by the Minister nor did the Minister respond. As such, at 09:33hrs on February 28, 2022, this media house contacted the Minister again.
That message read, “Good morning Minister Bharrat, this is [name provided], a reporter with Kaieteur News. I’m just checking back on the press release you had promised in relation to the update on the auditing of the US$9B Payara project.”
Minister Bharrat responded at 21:17hrs. In his first message, he said “ok” and the second message was a document. Kaieteur News responded, “thank you” to which the Minister said, “Look at this” and “And I will provide the information later.”
The document that the Minister had sent was not on the US$9B Payara Audit but in fact, a press statement dated February 28, 2022, by ExxonMobil Guyana on oil spill insurance. This media house then responded to the Minister by informing him that this publication has already read the document since earlier that day.
Minister Bharrat replied, “Ok” and Kaieteur News replied, “Will the update on the audit of the Payara project be provided?” The Minister then replied, “Yes…” and as such, this publication asked, “Anytime soon?” to which the Minister never responded.
On Wednesday afternoon, one month and five days since Kaieteur News first reached out to the Minister, this publication contacted the Minister via WhatsApp and stated, “Good afternoon Minister Bharat, this is [name provided], a reporter with Kaieteur News. It has been more than a month since you promised a press release on the update on the auditing of the US$9B Payara project.”
Minister Bharrat responded shortly after saying, “Sorry…got caught up with other matters,” Kaieteur News replied, “Can you say when will the update be provided?” but at the time of writing, the Minister has not responded nor has he provided an update on the US$9B Payara Audit.
Moreover, on January 24, 2022, Minister Bharrat had disclosed to the National Assembly 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 had 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.
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 commenced in 2019 after being awarded to British firm, IHS Markit – the contract cost to conduct the audit is US$460M.
It was reported that the Minister responded to Patterson’s query by saying, “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.”
He then 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.”
Notably, during a 2021 press engagement, Vice President, Bharrat Jagdeo had said that the government is disappointed that it has not been able to push through with the critical post-2017 audits. Expounding further, the Vice President had 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.” He noted too, “…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…”