Latest update September 7th, 2024 12:59 AM
Jun 02, 2024 News
Kaieteur News – The multi-million-dollar expenses racked up by American oil major, ExxonMobil between the period 2018 and 2020 are not included in the second audit report, completed by the local consortium, VHE Consulting.
This glaring observation is evident to anyone who has analyzed the document which delved into the company’s US$7.3B spending, billed to Guyana. The key data missing from the audit report is however detailed in the first report done by an international firm, IHS Markit. That firm was hired by the Coalition government to audit the company’s 1999-2017 expenses which totaled US$1.6B.
Both reports are now available on the Ministry of Natural Resources website. See link attached: https://nre.gov.gy/2024/04/12/vhes-initial-audit-report-for-the-stabroek-block-cost-recovery-audit-2018-to-2020/ and https://nre.gov.gy/2024/04/11/ihs-markit-final-audit-report-for-the-stabroek-block-cost-recovery-audit-1999-2017/
A comparison between the two documents reveals that contracts awarded for major expenses such as chemicals used in the operations; costs associated with the rental of supply vessels and drill rigs; subsea umbilical, risers and flowlines (SURF); helicopter charges; laboratory costs and waste treatment management among others have not been included in the report completed by the local consortium.
Financial Analyst and Certified Accountant, Floyd Haynes while appearing on Kaieteur Radio was questioned about such costs but said while the team reviewed those numbers, he was not allowed to reveal the information.
He explained, “I haven’t been told by my client to discuss this type of stuff so I want to respect the client. Once they ask me to speak on it, I’d be happy to provide (the information).”
Haynes noted that, “We have detailed schedules of all of those things. What I can tell you is that those were some areas that we looked at keenly – drilling, mud, all those types (expenses), helicopters and we benchmarked them against industry standards.”
It must be noted that the first audit report provides readers with a clear understanding of the company’s operations during the review period. For instance, the auditors explained that during the audit period, there were 10 exploration/appraisal wells spudded and drilled in the Stabroek Area. Drilling related costs recorded against these 10 wells account for US$903 million. A table is also included with details of the rigs used for the drilling operations at the exact wells- (see page 34 of report). No such information is included in the second report.
Notably, the IHS audit also presents the list of contracts reviewed by the audit team; again, the second report does not contain such details.
With regards to SURF plans, the first audit report provided an overview of an analysis done for the Liza Development Plan (see page 43 of report) and details the cost of the infrastructure and related services; again, such information is not reflected in the second report.
As it relates to drillship costs, ExxonMobil was flagged by the British audit firm (see page 49 of report) for single-sourcing the Deep-Water Champion drillship which was contracted from Triton / Transocean at a day rate of $707,620/day; with total contract spend amounting to $87 million. Meanwhile, there is no indication of rates, which Guyana was charged for the rental of drillships for the period 2018-2020.
In light of the blackout of information in the second audit report, Vice President, Bharrat Jagdeo was asked during his Thursday press conference to clarify whether the full report has been made public.
The Chief Policymaker for the petroleum sector however informed that he has not reviewed the document for himself and could not say. He explained, “I asked them to publish the audit report. It should be the audit report as received from the auditors, that’s the report so that would be the report they would publish, as received from the auditors. I have not checked it personally but I asked them to post it and they have posted it so that should be the report.”
The lack of such information in the report raises serious doubts about the government’s commitment to transparency in the management of the oil sector and further underscores the need for an independent petroleum commission to be appointed. Moreover, it leaves the Guyanese public in the dark regarding the use of the country’s oil resources at a time when the nation continues to protest for a fairer share of its profits.
Mineral and oil rich country borrowing to feed, clothe and house its citizens.
Sep 07, 2024
2024 Caribbean Premier League… GAW vs. SLK Kaieteur Sports – A fired up Guyana Amazon Warriors team will be looking to extend their mini unbeaten streak, as they will be gunning what could be...Kaieteur News – We have been advised by Guyana’s political elder that fifty years ago, the doctrine of defence in... more
By Sir Ronald Sanders Kaieteur News – There is an alarming surge in gun-related violence, particularly among younger... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]