Exxon’s audit

Nov 29, 2022 Editorial

Kaieteur News – We thank Professor Floyd Haynes for sharing his positions on the audit of ExxonMobil bills (‘Auditor only reviewing Exxon’s bill, not doing forensic audit’, KN November 27). We note that the audit is for US$7.3B and not US$9B.Now, Mr. Haynes took some positions with which we agree, and some which cause surprise, some uneasiness.

First, Mr. Haynes assured Guyanese that no stone would be left unturned in the audit of ExxonMobil’s costs incurred in the Stabroek Block. Second, that the audit being conducted is not a forensic audit, as a ‘forensic audit is done with the aim of identifying fraud and embezzlement, with the goal of gathering evidence to be used in court.’ Third, Auditor Haynes stated that “the goal is to verify the accuracy or rather the legitimacy and validity of costs claimed…There is a huge difference so I wanted to clear that up”. Again, thanks to Auditor Haynes for going to the lengths that he did to make clear what this audit is about, how handled, where headed.

We are, however, concerned that Auditor Haynes had seemingly decided beforehand, viz. a premediated basis, about the ‘degree of misconceptions in the press’ about the audit. We do not think that Mr. Haynes, speaking on behalf of his audit team, was in any position, and is still not, to take a stand, relative to what are ‘misconceptions’. Certainly, there can be agreement that the audit is for US$7.3B, and not US$9B, as that lower figure could be what is part of his audit scope, however expansive or limited it is. But, it was he himself who said very early in the audit calendar that certain sections of the press were guilty of grossly exaggerating what ExxonMobil is submitting to Guyana as part of its claims for monies that it spent on the Liza 1 and Liza 2 projects. That definitely puts him at a tremendous disadvantage in his verifying of “accuracy…legitimacy and validity of costs claimed”. He has boxed himself into a corner because of his earlier assertions about ‘media exaggerations’.

He could not have known, whether the media claims were exaggerated, understated, or fitted the bill. He could not have had any insight to take such a position. It did not speak well to the level of objectivity and neutrality that are mandatory for an undertaking of this nature, something so closely watched. It stands to reason, it raises questions of how his team was approaching the audit process under his command, and whether it was with the most open mind, a finely balanced one, that is. From our perspective, there was an early indication of some listing in a particular direction, one that is not helpful to Guyana’s interests.

What is required of Mr. Haynes and his audit team is there is no engaging in any ‘witch hunt’, which would be improper and unfair to ExxonMobil. Mr. Haynes and team, however, has a duty to drill down deeply, and get to the bottom of any apparent problematic areas, developments, leads, so that Guyanese get value for what was said to be spent. These are characteristics of dogged auditors. Moreover, a man of Professor Haynes learning and exposure cannot be unconscious of the way that oil companies conduct their business with poor Third World countries. He has to, or should, be cognizant of the record that ExxonMobil, in particular, has compiled in its dealings in a range of areas, such as the environment and taxation elsewhere, and even in the United States, of all places. A healthy degree of skepticism is never a bad ingredient in an auditor, may even qualify as the essence of soundness.

Finally, Mr. Haynes pointed out that this audit is the mother of all audits. ExxonMobil’s spreadsheets are so gigantic that they have to be cut into pieces. Yet, his team can get the job done in four months, which necessarily impacts sampling size and method used. It would be interesting to learn what the actual scope of this audit is, to determine whether it was customized to leave out much substance, and focus on fluff. After all of Auditor Haynes clarifications, we await to learn how well his team did its job.

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Exxon’s audit

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