In the wake of government’s silence on its failure to audit over US$9.5 billion to date in post-contract expenses for Stabroek Block petroleum works, the Opposition APNU+AFC has taken to Parliament seeking answers and has asked for a copy of the US$460 million pre-contract audit report it had initiated.
In the name of Shadow Minister for the petroleum sector David Patterson, government is being asked a number of questions on why it abandoned the procurement process to find an auditor along with who made the decision to allow the audit to fall into default.
“Can the Minister confirm that the audit of ExxonMobil pre-contract costs of US$460 million was completed? If yes, can the Minister provide the Parliament with a copy of the Audit Report? Can the Minister confirm that Budget 2021 includes allocations for the costs for conducting audits on ExxonMobil post-2017 costs? If yes, kindly state the budgeted sums? Can the Minister provide this Parliament with the reason(s) to discontinue the tender evaluation for the auditors for ExxonMobil post-2017 expenses which totalled approximately US$9 billion?” Patterson asks of the Minister of Natural Resources.
“Can the Minister inform this Parliament, who made the decision to discontinue the evaluation process? Can the Minister inform this Parliament, if the National Procurement and Tender Administration Board (NPTAB) were informed as to the reasons why the evaluation process was discontinued? If yes, can the Minister provide this parliament with copies of these correspondence? Can the Minister provide the names of all the persons, firms and companies who submitted bids to perform the audit and the specific reasons why none were successful?” the questions continued.
Government is also being asked if the Ministry of Natural Resources or any other agency with oversight of the oil & gas sector, has approached ExxonMobil for an extension of the deadline for auditing their US$9.5 billion expenses. If it did, then the opposition wants proof as it has asked that “this Parliament [be provided] with such documentation including the response by ExxonMobil.”
President Irfaan Ali has since been written to by Stabroek News on the issue, requesting answers to a number of questions. His Press and Communications Officer, Suelle Findlay-Williams, has said that she would relay the questions to Ali.
The expiration of the deadline for the examination of the expenses means that the country has not been able to determine if the US$9.5 billion expenditure by ExxonMobil and partners was warranted. If the expenses were overstated, it would have caused a reduction in Guy-ana’s profit oil take.
Two Mondays ago, Vice-President Bharrat Jagdeo announced that ExxonMobil’s post-2017 expenditure for the Liza-1 and Liza-2 wells would not be audited as government was not able to select a strong local group to undertake it. This statement was despite the fact that the government had advertised this year for foreign firms.
“We have been very disappointed that we have not been able to select a group to do the audit of the post-2017 expenditure on Exxon. The reason is we did not have a strong local content. We had two local groups that came in but they were not strong enough. We want to build a capacity in Guyana to do this audit,” he said.
“We think our people have enormous skills, forensic skills, auditing skills, and we are looking to see if we can’t have an arrangement where we have a consortium of local people partnering with a foreign company so we can build capacity right here in Guyana. We are disappointed that from the individual bids we have not been able to do this. When I get back from Scotland [from the COP26 conference] I have asked the minister to see if we can’t get all the groups that expressed interest to see how we can partner, they can partner with a foreign company to do this audit. We also have to build this capacity in GRA [Guyana Revenue Authority]. GRA has been mandated to build a capacity to do this. But it is a disappointment because it has been quite a while,” he added.
Jagdeo’s announcement has been met with a torrent of criticism and since then the government has maintained silence. There has been no reaction from President Ali or the Minister of Natural Resources, Vickram Bharrat.
Prior to Jagdeo’s casual announcement two weeks ago, there had been no statement by the government that it was having difficulty sourcing an auditing firm and that there was a risk of the statutory period for doing the audit expiring.
Jagdeo’s position is an about-turn from his and the PPP/C’s position on auditing the expenses of oil companies. As Opposition Leader in 2018, he had vowed that should the party get back into government, it would ensure that all of ExxonMobil’s claimed expenses would be subjected to rigorous scrutiny.
The PPP/C was flayed on Monday by Chair of the Public Accounts Committee (PAC), Jermaine Figueira, who said that that the failure of the government to undertake an audit of ExxonMobil’s expenditure of US$9.5 billion is a glaring example of its real position on transparency, accountability and good governance.
In a comment to Stabroek News on the revelation made by Jagdeo, Figueira said: “All the talks the now government had pre-2020 about ExxonMobil and their promise to change the contract, was just that, talks. Nothing they promised to do to ExxonMobil and that contract was done and quite frankly, the government’s attitude to this new form of economic colonialism [is that] nothing will be done.”
Figueira, a Member of Parliament for APNU+AFC, said that Jagdeo’s disclosure at a press conference last week was more of a “mixture of an academic and political response to evade the failure of the government to make right the combined failure of both administrations [APNU+AFC and PPP/C] for the benefit of the Guyanese people”.
The PAC Chair said that the government is squandering yet another opportunity to right a wrong.
“Can you imagine Jagdeo having the same energy on the then non-issue of the signing bonus of US$18 million the APNU+AFC coalition had received?
“The fact of the matter is, there has been a combined failure of both administrations to conduct those very important audits of those oil companies and yet again the failure continues,” Figueira said.
He added that the Vice-President’s “cavalier attitude” in his response should be concerning to every right-thinking Guyanese, especially those who have an appreciation for what a ten or twenty per cent of US$9.5 billion dollars could do for the country and its people”.
Equally, Figueira said that the people should be demanding that an audit be done and be made public.
