Govt. silent on US$9 billion audit of Exxon’s expenses - Aubrey Norton

Govt. silent on US$9 billion audit of Exxon’s expenses – Aubrey Norton

Oct 16, 2022 News

By Davina Bagot

Kaieteur News – A four month audit into the bills handed to Guyana by oil giant, ExxonMobil, over the years 2018 to 2020 was scheduled to be completed in September of this year, but although the findings from that review will soon be overdue by one month, the People’s Progressive Party (PPP) Government is yet to give an update into the massive spending of the oil company.

Leader of the Opposition, Aubrey Norton has blamed the ‘incompetence’ of the administration for failing to publish the findings of the report, cognizant that there has been no word from the party where the audit is concerned.

Opposition Leader, Aubrey Norton

The contract to facilitate the audit was signed in May of this year, meaning it was expected to be completed last month. Vice President, Bharrat Jagdeo who has been controlling the petroleum sector is yet to give the nation an update as to whether the review process has been completed or if the team conducting the audit was granted additional time to complete their work.

To this end, Norton in response to a question from this newspaper during his weekly Press Conference explained, “It is the incompetence of the Government that has caused us not to be able to audit. I did point out that the EPA – the Energy authority under us, (Dr. Mark) Bynoe and (Dr. Vincent) Adams – were increasing the capacity of those institutions to audit and monitor. This Government came into place and destroyed that capacity rather than build on it.”

To this end he argued, “the question of non-auditing is a question that has to be placed squarely at the feet of the People’s Progressive Party and Bharrat Jagdeo because one of their incompetence, and two, because they refuse to increase the capacity of those institutions to do what is necessary and so again I repeat, there must be mechanisms for auditing, there should be mechanisms.”

The Opposition Leader went on to highlight the importance of the financial reviews being conducted, stressing that Guyana can lose out on profit oil if cost oil is not vetted in detail. Under the 2016 Production Sharing Agreement (PSA) Guyana signed with Exxon, the company is allowed to take out 75 percent of the revenue from oil production to cover its expenses. The remaining 25 percent is then split between Government and the oil companies, with each party receiving a 50 percent share.

VHE Consulting. which is a registered partnership between Ramdihal & Haynes Inc, Eclisar Financial, and Vitality Accounting & Consultancy Inc. was awarded the contract to review Exxon’s expenditure. The Local Consortium is supported by International firms – SGS and Martindale Consultants for the ‘Cost Recovery Audit and Validation of the Government of Guyana’s Profit Oil Share’.

The review is costing Guyana some US$751,000. Minister of Natural Resources, Vickram Bharrat had assured that the findings of the audit would be made public.

This is particularly important as the public is unaware of the outcome of the audit of the US$460 million pre-contract costs, which was done by IHS Markit. The contract to the UK firm had cost US$300,000.
Nevertheless, Bharrat told media operatives that Government will rely on the findings and recommendations of the report to take “appropriate steps”. While qualifying the Government’s decision to use foreign companies on the review committee, the Minister explained, “The technical company is needed because our local auditors might be very familiar with the auditing (of) basic expenses (such as) fuel, meals, transportation, but when we are talking about jumpers and risers and Christmas trees, FPSO (Floating Production Storage and Offloading vessel)and these technical terms obviously they will need that kind of technical knowledge and expertise onboard to assist them to have a thorough exercise being done.”
He added that there will be new arrangements for future audits even as the Government seeks to conduct annual and even bi-annual cost reviews for ExxonMobil.

After the contract was signed, Opposition Economist, Elson Low noted that once completed the report on the US$9 billion audit of ExxonMobil’s expenses should be made available for parliamentary scrutiny. He said that this is particularly important as the four months timeframe to complete the audit remains questionable.

In fact, Low said that not only should the audit be made public but the Parliamentary Oversight Committee such as the Public Accounts Committee (PAC) should be privy to the details of the expenses so that the National Assembly can publicly debate its findings.
He said that this is the level of transparency and accountability that will leave no question about Exxon’s oil spending unanswered.