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Guyanese in the dark on US billions being recovered by ExxonMobil- AFC
…calls for release of cost recovery statements
Kaieteur News- As the Government of Guyana (GoG) continues to face heavy criticisms for the blackout of information on the use of the country’s oil and gas revenue, the Alliance For Change (AFC) has pointed to the lack of transparency in the billions of US-dollars being recovered by ExxonMobil and partners.
Former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams on Friday during the party’s weekly press conference flagged the issue, calling for the cost recovery statements being prepared and handed over to the GoG, by Exxon, to be made public.
Former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams. (Guyanese in the dark on US billions being recovered by ExxonMobil- AFC)
In highlighting the importance of this information, the Environmental and Petroleum Engineer reminded that a whopping 75% each month is deducted by the oil companies towards cost. Be that as it may, he argued that the country is clueless as to what exactly its oil is being used to fund. “We do not see a breakdown in those numbers. We are not even getting in the audit as to what’s coming out for operations and what’s coming out for capital,” Dr. Adams argued.
Even in the case of a house mortgage, he said a schedule is provided with how the money is paid off. To this end, the former EPA boss noted that while it is public knowledge that the Opposition has had difficulty in securing answers and gaining cooperation from the government, especially with regard to the oil and gas industry in the National Assembly, efforts must continue in the House for transparency in this regard.
“I would suggest that we continue to persist in Parliament and ask for this kind of information to be released, if not in Parliament to the public,” he noted.
Annex ‘C’ of the 2016 Petroleum Agreement between the GoG and ExxonMobil makes it explicit that the company is required each quarter to prepare a cost recovery statement. It goes on to highlight that the statement must include: (a) recoverable contract costs carried forward from the previous calendar quarter, if any; (b) recoverable contract costs for the calendar quarter in question; (c) total recoverable contract costs; (d) quantity and value of cost oil taken and disposed of by the contractor for the calendar quarter in question; (e) contract costs recovered for the calendar quarter in question and (f) total cumulative amount of contract costs to be carried forward into the next calendar quarter.
The cost recovery statement for each quarter is required to be submitted no later than 30 days after the end of each quarter.
Dr. Adams told Kaieteur News in response to a question that these statements must be made public for the transparent management of the country’s resources. He was keen to point out that the audit process does not delve into all the expenses but a mere sample of costs incurred by Exxon.
The statements made by the former EPA Head comes in light of the recent disclosure by Vice President Bharrat Jagdeo that although Guyana is paying for the assets being used in the offshore production of oil, the country is not a part-owner of the assets.
The VP at his Thursday press conference explained, “It’s a simple thing. You’re not part owner of any company. You don’t own these assets. So, ExxonMobil puts in the investment. They create a company; the company has these assets. We are entitled to receive in the future, 50%, once everything is paid off…you are entitled to collect 50% of future profits and they get 50% and then 2% royalty on the gross…that’s your entitlement to collect.”
On the other hand, Jagdeo said that if the company was to dissolve and sell the assets, Guyana may then be entitled to 50% of the assets. “Now if you have a dissolution of the company and they sell off the assets, I guess we are entitled to 50% of the assets too in the situation where you dissolve the company so I hope that clarifies your question,” he noted.
(Guyanese in the dark on US billions being recovered by ExxonMobil- AFC)
(Guyanese in the dark)
- Adams, AFC, cost, oil, recovery, revenue, Statements, Transparency
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