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Full probe needed into Exxon’s US$214M audit fiasco – Chris Ram
Kaieteur News – A comprehensive investigation is needed to understand who were the persons within the Ministry of Natural Resources that engaged in an “unauthorized reduction” of ExxonMobil’s US$214M in questionable expenses to US$3M, says Chartered Accountant and Attorney-at-Law, Christopher Ram.
Chartered Accountant and Attorney-at-Law, Christopher Ram
In an invited comment, Ram told Kaieteur News that the revelations that have come to light about the handling of the audit is “sickening and embarrassing to all involved.”
Vice President, Bharrat Jagdeo, the chief policymaker for the oil industry had exposed last week that the ministry was engaged in deliberations with Exxon that saw over US$214M in questionable expenses being slashed to US$11M and then to US$3M. The US$214M figure was flagged by British Consultancy Group, IHS Markit, in a report it produced in 2021. The company was hired to audit US$1.7B in expenses Exxon incurred from 1999 to 2017. That US$214M figure was also given a no-objection by the Guyana Revenue Authority (GRA) which had recommended to the Ministry of Natural Resources for the audit to proceed to closure.
Despite this recommendation, Jagdeo said he discovered that the ministry still entertained Exxon in a breakdown of costs, adding that this should not have occurred. Natural Resources Minister, Vickram Bharrat also disclosed via a statement that he supports the VP’s position. Bharrat said he played no part in those discussions with Exxon but it was his staff at the unit that engaged in “unauthorized” discussions and an examination of documents sent by Exxon.
Like the Vice President, Bharrat said he was of the opinion that the reduction in questionable costs, subsequently channeled to him and the Vice President, was emanating from GRA. Bharrat said corrective action has since been taken and his staff has been told to cease such discussions. Bharrat said this week that no one has been fired. He also declined to name the persons who were engaged in “unauthorised” discussions with Exxon.
Since the disclosure of the mishandling of the audit process, Shadow Minister of Oil and Gas, David Patterson called for the “rogue elements” in the ministry’s Petroleum Unit to be exposed and fired. Ram told this newspaper however that that would only be addressing the matter in part. He said, “This matter needs to be fully investigated to identify the persons involved on the part of the ministry and those from the (Exxon-led) Consortium involved in this unauthorized reduction.”
With respect to the disputed sums, he recalled that the report by IHS did include some US$214.4M because of inadequate supporting documentation. He said, “But there is a process for resolving such disputes in the course of an audit. Routinely, such matters are raised with the auditee who is given an opportunity to address them with the auditors. What the Vice President is suggesting is that the matter was not resolved with the auditors but, improperly, between staff of the Ministry of Natural Resources and representatives of the Oil Companies.”
Ram said it is worth noting that ExxonMobil Guyana Limited is the Operator under the 2016 Stabroek Block Agreement, and it is its representative who would respond to any audit issues. He said it would be interesting to know who dealt with the ministry.
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