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Oil audits and partners

Jun 07, 2024 Editorial

Kaieteur News – ExxonMobil holds itself out as a healthy partner to Guyana, viz., until it is time to count profits.  When the company’s profits are part of the local oil equation, then partnership takes a backseat.  We have this US$7.3B audit completed by VHE Consultants for ExxonMobil’s expenses for the 2018-2020 period and it has gone nowhere.  The 2016 Production Sharing says one thing, Guyana’s man in charge of oil, Vice President Bharrat Jagdeo says another, and ExxonMobil doesn’t care what either say, and continues to do its own thing.

It is a long time that 231 days beyond what is permitted by the 2016 PSA.  Section 1.5 (b) doesn’t allow for audit findings to be hanging unresolved and unclosed.  Jagdeo says that the government is still going through the first audit, the 1999-2017 audit executed by the British-based IHS Markit, which has US$214M in findings.  The back and forth surrounding that first audit has impacted the second one completed by VHE Consulting, which is waiting its turn in line, from all indications.  This reinforces three points that we at this publication have made repeatedly.

First, ExxonMobil can no longer be seen as a partner to be trusted in matters related to money with this nation’s oil wealth.  The first audit, 1999-2017, is a relatively smaller one, though covering a much longer period.  Those findings should have been resolved within the time permitted by the PSA and not going back and forth, as Jagdeo himself noted.  This is unacceptable, and the government should ensure that its impatience and disappointment with ExxonMobil’s delaying tactics are made clear to Country Head, Alistair Routledge.  When the Guyanese people are impatient with ExxonMobil’s stonewalling tactics, the PPPC Government should be even more furious.  When the people making the decisions at ExxonMobil conduct themselves in this dilatory manner, with one obfuscation after another, then Jagdeo should read Routledge the riot act.  The PPPC Government, from the president to various ministers, love to read riots acts to Guyanese.  The same should apply in the sharpest and sternest manner to ExxonMobil.  This is Guyana’s oil, and Guyanese will be the ones to call the shots on how its developments are handled.  Make audit findings and the closure of such the first example.  It is not only ExxonMobil that knows about oil profits, but Guyanese also do.  So, when there are significant audit findings, close them out with the numbers finalized in a respectable time. This must be the ongoing standard.

Second, we have said and written that ExxonMobil is corporate greed in its finest exhibition.  This American company wants everything, all the profits, for itself, and would go to any lengths to squeeze Guyana for the last dollar. Check what is happening. For the splash-in-the-bucket cash (slightly over US$100M, that is its share) ExxonMobil is so barefacedly, doggedly resistant to closing out the audit findings and handing back to Guyana what it expensed so improperly.  This should answer all questions and concerns about how far this company would go to snatch a dollar for itself at the expense of Guyana.  In circumstances like these, there is ample justification in the assessment that ExxonMobil is less of a credible partner and more of a bird of prey.  Right is right, and principle is principle, but we have no choice but to ask: what about ExxonMobil, what are its partnership principles?  Some things do speak for themselves, and not in a whisper.

Third, one of the recommendations that we have offered to the government is to slowdown project approvals and offshore activity, if only marginally and sensibly.  Give Guyana a chance to build capacity, and grow in expertise alongside the oil developments.  Perhaps, because the source of such a recommendation is this paper, it was given the shortest thrift.  Now reality has caught up with the PPPC Government.  Completed audits struggle to get to a final closure, and this emphasizes the leadership recklessness that has plagued this oil sector.  The exposures through audit findings note what is happening on land.  No Guyanese, not even the government and its self-congratulating leadership team, has a clue about possibly costly exploitations occurring offshore.  Slowdown so that learning intensifies, so that ExxonMobil is watched closely.

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