Despite promises that oil and gas transactions would be transparent and the public would be kept up to date, the audit by UK firm IHS Markit of the US$460M in pre-contract costs claimed by ExxonMobil still has not been released by government and the opposition will today be asking for answers when the National Assembly meets.
“Can the Minister confirm that the audit of ExxonMobil pre-contract costs of US$460M was completed? If yes, can the Minister provide the Parliament with a copy of the Audit Report?” questions on a notice paper to Minister of Natural Resources Vickram Bharrat from oil and gas Shadow Minister, David Patterson stated.
Six years after ExxonMobil discovered oil in the Stabroek Block and two years after the first audit of any oil and gas expenses, the examination of ExxonMobil’s spending continues to only be privy to government and the company.
A number of persons and organizations have called on the PPP/C government to not only release the report but inform the nation as to the status of the auditing of post-contract costs from 2015 onwards.
The IHS Markit audit, which had been commissioned under the former APNU+AFC government, will provide the first real insight into whether ExxonMobil has been making undue expense claims. Baseless expense claims could reduce the quantum of profit oil available to Guyana. The non-release of the audit report has been compounded by the PPP/C government’s casual approach to the auditing of the whopping US$9.5b in post-contract costs.
Former Auditor General Anand Goolsarran, Chartered Accountant Christopher Ram and the Opposition APNU+AFC among others have called on the PPP/C government to release the IHS Markit audit report on the US$460m in ExxonMobil’s pre-contract costs.
“In December 2019, the Government awarded a contract to the United Kingdom-based firm IHS Markit for the auditing of the pre-contract costs. The audit was expected to be completed over a four-month period but this period was extended by a month because of the COVID-19 situation. However, the results of the audit are yet to be made public. In the circumstances, it is unclear how much of the pre-contract costs claimed by Exxon is considered recoverable costs,” Goolsarran had written in one of his Stabroek News columns late last year.
“We call on the Government, in the interest of transparency and proper accountability, to release the audit report for the benefit of the nation. After all, Guyana’s natural resources belong to its citizens and should be exploited so that they obtain the maximum benefit,” he added.
Today, in addition to the pre-contract audit’s status, Patterson also wants questions surrounding the discontinuation of a tender to find post contract auditors answered.
“Can the Honourable Minister inform this Parliament if the Tender Evaluation for the Auditors for ExxonMobil’s post–2017 expenses which totalled approximately US$9B was discontinued? (b) Can the Minister inform this Parliament who made the decision to discontinue the evaluation process? (c) Can the Minister inform this Parliament if the National Procurement and Tender Administration Board (NPTAB) was informed as to the reasons why the evaluation process was discontinued? If yes, can the Minister provide this Parliament with copies of these correspondence?” questions posed to Bharrat ask.
The Minister has been asked to provide the names of all persons, firms and companies who submitted bids to perform the audit and specific reasons why none was successful?
The minister has also been asked to confirm if Budget 2021 included allocations for the costs for conducting audits on ExxonMobil post–2017 expenses and if that answer is in the affirmative then he should state those sums.
ExxonMobil has told this newspaper that it is confident of its bookkeeping matters and transparency of the company. The company says that it has never shied away from audit requests and that it submits periodic reports on its spending to a number of government agencies here.
“ExxonMobil Guyana considers audits a normal part of our operations and cooperates with the government so it can fulfill its obligations. We are fully transparent with the Government on our budgets and cost banks for each block and have implemented extensive cost controls across our business in line with our contracts and the laws of the country,” ExxonMobil spokesperson Janelle Persaud had responded when asked questions on the matter by this newspaper.
“Audits are just one part of a comprehensive framework of controls established by the government. These include setting annual budgets for each block we operate which are reviewed by the Ministry of Natural Resources, and reporting actual spend against these on a monthly basis to the Ministry. We also steward and report costs for each project that is approved and each well that we drill,” she added.
