ExxonMobil’s US$7.3B audit report will be addressed at the appropriate time – President Ali

Apr 01, 2023 News

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Kaieteur News – The local team that partnered with an American firm to conduct an audit of ExxonMobil’s US$7.3 billion expenses should have completed and handed over the final report to the Government of Guyana (GoG) by the end of March, but President Irfaan Ali told Kaieteur News on Friday that he would reveal details regarding this review only at “the appropriate time.”

President Ali was at the time responding to a question from Kaieteur News during a public press conference at the Leonora Track and Field Centre, West Coast Demerara (WCD), when he declined to say whether government has since been furnished with the final audit report.

Instead, the President assured, “We will definitely give you that update at the appropriate time.” He went on to explain that the People’s Progressive Party (PPP) was conducting an outreach in the Region to address the concerns of the citizens there.

The President’s position only adds more doubt concerning the integrity of the audit report, as both the Vice President (VP), Dr. Bharrat and subject Minister, Vickram Bharrat have been avoiding the issue of ExxonMobil’s audits.

This newspaper recently reported that the VP when questioned about the outstanding audits for the oil company, requested that the question be directed to the Minister; however, when the Minister was approached, he explained that Jagdeo had already addressed the issue.

During the Consideration of Estimates for Budget 2023, Minister Bharrat told the House, “The final report is due in March of 2023.”

President Irfaan Ali in November last year told this newspaper that the review process was estimated to wrap up before the end of 2022, with the first report ready by December.

In a recent statement from the Ministry of Natural Resources, it was explained that ExxonMobil was being given an opportunity to respond to the findings of the audit team.

The contract for the Exxon audit was signed on May 24, 2022 for VHE Consulting which is a registered partnership between Ramdihal & Haynes Inc, Eclisar Financial, and Vitality Accounting & Consultancy Inc. 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’. To this end, the audit zoomed into ExxonMobil’s expenses between the years 2018 to 2020 that have already been billed to the country.

When the contract was signed, it was explained that the process would be completed in four months; however, Minister Bharrat recently sought to explain that the timeline allotted was 120 “working days”.

“I think from the inception when the contract was signed, there was a bit of misunderstanding. In the contract, it says 120 working days and I think there was a lot of misconception…that it would be 120 running days or calendar days, but its 120 working days,” the Minister explained.

In the meantime, the Opposition believes that the government is deliberately hiding the audit reports to cover the tracks of the oil giant, which may reveal possible inflated bills or spending on areas that the contract does not allow to be recovered.

Shadow Natural Resources Minister, David Patterson in an interview with Kaieteur News last month said, “the government does not want the report issued publicly, since it will highlight ExxonMobil’s billing practices and the government’s very supportive handling of the sector.”

Patterson pointed out that the audit report would confirm the costs Exxon are claiming to be recoverable and would lay fears aside of possible inflated numbers.

Guyanese are paying the auditors some US$751,000 to complete the process. 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 and commenced since 2019 under the former A Partnership for National Unity + Alliance For Change (APNU+ AFC) Coalition.

In February, this newspaper reported that, four years after awarding the contract for that audit to be completed, the process was still to be finalized.

This is so at least according to Minister, Vickram Bharrat. He told the National Assembly in January that this process will “hopefully” conclude “very soon”. There has been no word since then on that audit from the government.

He explained, “They would have found that there was need to go back and to do some further work with the operator which was done and a final report has now been submitted and is being reviewed by all the relevant agencies (and) stakeholders, including the petroleum unit at GRA (Guyana Revenue Authority). Once that is over, we will conclude the first audit hopefully very soon.”

In March 2020, this newspaper reported that Commissioner-General of the GRA Godfrey Statia has confirmed that he is in receipt of an initial audit report for the US$460M in pre-contract costs Guyana must pay to ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL).

Statia at the time said he was now examining the report, after which he will do his own internal work, and then have discussions with IHS Markit, the UK Company that was recruited to audit the billions of dollars ExxonMobil said it invested in the Stabroek Block.

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• American, ExxonMobil, Government, People’s Progressive Party (PPP), President Ali

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