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Another audit, another set of questions

Jan 24, 2025 Editorial, News

Editorial…

Kaieteur News- A third audit of US$19.6B of expenses of ExxonMobil for the period 2021 to 2023 will take five months to complete.  The team of VHE Consulting and Martindale Consultants, in association with the Norwegian technical firm IKM Acona AS must be in the running for consideration as miracle workers. With five months to audit US$19.6B in expenses of a sophisticated oil company as ExxonMobil, what should Guyanese expect?

What can they get as value for that huge sum when ExxonMobil has not been the most cooperative auditee, as a prior audit team had lamented?  We think that it will be more of the question of results, more issues taken with the Terms of Reference of the audit and the depth of the probing to unearth the tricks of ExxonMobil and its partners.  Because the ExxonMobil-led consortium does not present a combined set of books, five months take on a whole new meaning.  The challenge is that three sets of books/expenses (ExxonMobil, Hess Corporation, and China National Offshore Oil Corporation) have to be audited.  This audit that is scheduled to be completed in March introduces more uncertainty,  and raises a fair amount of suspicion.

The fact that Permanent Secretary of the Ministry of Natural Resources, Joslyn McKenzie, is doing the honours for the PPP/C Government with this audit speaks for itself.  Vice President Jagdeo usually commandeers such announcements, and side-lines ministers and senior public servants from having any input.  With PS McKenzie pushed into the front row, it is clear that this audit is going to be a source of much attention, and with probably the disbelief that has accompanied the previous audits.  We think that this is why Jagdeo took himself out of this US$19.6B five-month audit.  The PS has to deal with what follows, and with others setup to be the whipping boys.

According to PS McKenzie, the Guyana Revenue Authority (GRA) has the lead role and that other expert areas of the government will be closely involved.  The Audit Office is one of the more prominent State entities identified.  First, has the GRA succeeded so quickly in building the capacity that it was so short of, was losing to more deep-pocketed competition for expert staff?  Second, the Audit Office has slipped into an invisible role, with many Guyanese concerned about how much it is looking at, and how deep it is digging.  Considering the presence of the GRA, the Audit Office, and the Bureau of Statistics, among other State agencies, there should be a swarm of bodies involved in this audit.  Will their numbers make a difference, the qualitative one that Guyanese must get to ascertain how their oil dollars are being spent?  Past audits of ExxonMobil expenses have generated mixed reactions, at best, with the thoroughness and credibility of those audits not held highly.

Veterans in the local audit field have raised questions about whether the audit teams possessed the necessary competence to undertake and fulfil the demands that these ExxonMobil expenses require. One audit team was compelled to speak out about the complicated nature of ExxonMobil’s accounting systems, and how tedious it was to get what was wanted.  In fact, that same team was blocked by ExxonMobil’s watchers from accessing raw production data.  Because so much of ExxonMobil’s offshore operations is conducted away from the eyes and knowledge of Guyanese, secrecy has abounded.  To compound matters, the auditors have found that their work is made more cumbersome than it should be, due to ExxonMobil’s subtle resistance to their presence.

Guyana got a bad deal with the ExxonMobil oil contract.  Expenses up to 75% are snapped up from the top of oil revenues, with chronic secrecies prevailing relative to those expenses.  Audits, therefore, take on an even more vital role.  With proper and comprehensively probing audits, there is the one opportunity for Guyana to ensure that it is getting value for money, and from expenses that belong to this country.  Past audits have always seemed to lack persuasive power in their results.  With such a huge amount, US$19.6B, involved, this could be a backbreaker.  Let’s hope that Guyanese get  some degree of truth and justice from this seemingly rushed third audit.  The prospects are not too encouraging.

(Another audit, another set of questions)

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