Three months later…No update on Exxon’s second audit report

Jul 29, 2024 News

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Kaieteur News – The Government of Guyana is yet to provide the nation with an update on the audits in terms of the specific penalties the oil companies will face for misusing Guyana’s oil profits, three months after they were made public.

The Kaieteur News reported on April14th of this year that after a campaign by the newspaper that lasted over a few months the government finally released the audit reports to the public. Vice President (VP) Bharrat Jagdeo at his Thursday April 11th press conference told the media that the reports are available online via the Ministry of Natural Resources website.

Since their release the reports which cover the years 1999-2017 and 2018-2020 respectively, several cases of inflated costs and gross misuse of the oil funds were unearthed by the auditors and highlighted by the media.

On Thursday at his weekly press conference the VP was asked by the media if there were any updates in relation to the audits that he could provide to the public. He questioned “Audit findings? No. I am not reporting on audit findings here. I will not report on audit findings.”

The Kaieteur News has been leading calls for the audit reports to be released, along with members of civil society, as well as the political Opposition. Stakeholders are of the belief that the government was hiding the corrupt actions of the oil companies that were exposed in the audit reports done by a British firm, IHS Markit followed by the second audit conducted by VHE Consulting for a review of US$1.6B and US$7.3B, respectively.

Notably, the first audit report recommended that the Government of Guyana (GoG) disallow US$214M in costs being claimed by Exxon for the misuse of Guyana’s oil profits and failure to justify expenses. Meanwhile, the report by VHE Consulting- Ramdihal & Haynes Inc; Eclisar Financial; and Vitality Accounting & Consultancy Inc- also highlighted a number of areas where the oil company misused the country’s oil revenues. Government has since indicated that it will be heading to arbitration over the questionable US$214M sum, since the operator is refusing to accept the audit findings.

In the meantime, the process is still ongoing between the Guyana Revenue Authority (GRA) and Exxon on the findings of the second audit. It is important to note that some of the major expenses racked up ExxonMobil between the period 2018 and 2020 are not included in the second audit report, completed by the local consortium, VHE Consulting. 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.

While Financial Analyst and Certified Accountant, Floyd Haynes confirmed during a radio interview with the Kaieteur News 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.”

These are not present in the report that is available online, and a member of the team had confirmed with this publication that the number of pages online and what was handed over do not add up. This has led to question as to whether the full report was released.

Jagdeo was asked about this and he maintained that the full report for the second audit conducted by local consortium VHE Consulting was published online, despite auditors said that around 40 pages of the original document are missing. He explained that, “The auditors said to me…I asked the Ministry of Natural Resources, did you put up the whole report that you received from the auditors? They said to me, yes we uploaded the full report.”
Jagdeo went on to say that he was informed that the management report was a separate document and the auditors advised that it be kept out of Exxon’s eyes.

“They said the management report is separate, we got a letter from the auditors, we were told by the auditors and then we got a letter to confirm it. Ensure that ExxonMobil does not see it. That’s it. So they told me and I believed them more than the Kaieteur News so if you can’t identify the person who told you that I’m not responding to it. Let’s move on.”

However sources close to the process explained that approximately 40 pages of the audit report have not been included in the document that was made public by the government. The source told Kaieteur News, “The audit team submitted a detailed report of approximately 170 pages, including a manager’s report to the Ministry.” The document available online however consists of 135 pages.

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• Audit, findings, Jagdeo, oil, updates

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