‘No money in budget to monitor & audit oil sector’

Jan 19, 2023 News

---

…Opposition Leader says this spells danger for Guyana

By Davina Bagot

Kaieteur News – Opposition Leader, Aubrey Norton is stunned at the Government’s failure to appropriate funds in this year’s Budget to help the country improve its auditing and monitoring capabilities, as oil production activities continue to accelerate.

On Monday evening, following the Budget presentation by Minister with Responsibility for Finance Dr. Ashni Singh, Norton said he expected that this year’s fiscal plan would have made specific provisions to improve the country’s human resource capacity.

“I would have thought that in a Budget like this, the minister would have been speaking in terms of human resource development, that we have put resources there to improve our capacity to audit cost oil. We would have put resources there to be able to monitor what is happening offshore. There is none of that and therefore, you are not increasing our capacity to ensure we get what we deserve in terms of profit oil,” the Opposition Leader pointed out.

In a subsequent interview yesterday, Norton explained that Guyana must be able to determine cost oil on its own, rather than await reports from the developer of the resource. This means, putting measures in place to be able to monitor the expenditure Norton said. “For you to determine what is cost oil, you need to have people with the requisite skills to know what the actual cost of production is and therefore if you are serious about ensuring Guyana benefits, one of your first tasks is to develop the institutional capacity and capability to monitor first and audit what is happening.”

According to him, this Budget should have not only streamlined resources towards this objective, but also clearly outline the kinds of skills that would be needed for Guyanese to monitor the operation and conduct its own audits to ensure the right figures are being presented. He was keen to note that such a simple step would have aided in ensuring Guyana gets it rightful share of the profits.

The Opposition Leader said that the failure to implement such measures spell danger for Guyana and leaves the country at the hands of the oil companies, which can very well decide to inflate the numbers.

“If you do not know exactly what is happening, you can be given any figure and you need to live with that figure, rather than being able based on your capability to be able to analyse, audit and know that these are the actual figures and therefore determine that this is the kind of profit that exists and this is the profit we are sharing,” he explained.

The Leader said that the Government has decided to sit back and assume that the oil companies are presenting Guyana with the correct figure as it relates to expenses to develop the oil resource. To this end, he argued, “I don’t think any business should be organized in a way that you are dependent on the people you are doing business with to tell you how much you actually spent to explore and how much is profit.”

The Leader of the Opposition said he plans to raise these issues with the Government at the Parliamentary level during the Budget Debates over the next few weeks.

Norton argued that this year’s Budget is the largest ever and more worrying is the fact that no investment is being made to strengthen Guyanese oversight in the industry that is responsible for bringing in the largest amount of revenue.

Delving into this year’s allocation for the Ministry of Natural Resources- the agency responsible for the oil and gas sector- this newspaper found that a programme that commenced under the A Partnership for National Unity + Alliance For Change (APNU+AFC) Coalition is slated to continue.

The objective of the ‘Oil and Gas Sector Development Programme’ is to, among other things, enhance the legal and institutional framework for management and oversight of the local oil and gas sector.

It is being funded by a loan from the International Development Association (IDA) – an international financial institution which offers concessional loans and grants to the world’s poorest developing countries.

This project does not directly cater to developing capacity to monitor the offshore operations and conduct audits.

In the meantime, Norton said billions have been allocated to other sectors, while a major priority area has been left with no funding.

This year, a whopping $136.1 billion has been set aside for the development of roads and bridges in the country. Last year, government spent $95.7 billion in this area.

The Ministry of Education is poised to receive $94.4 billion this year while $54.4 billion has been allocated to the Housing sector. Another $84.9 million is budgeted for the Ministry of Health. Notably, Government has also set aside US$43.3 billion this year for its Gas-to-Energy project as well.

---

• Audit, budget, Monitor, oil, opposition

---