Government remains tight-lipped on the findings of ExxonMobil’s $460 million pre-contract audit, almost two years since the findings were handed over to the Energy Department, even as it trumpets transparency in the oil and gas sector.
“We call on the government to clarify whether the audit has since been completed, and if so, when the results will be released to the public?” former Auditor General, Anand Goolsarran, last week stated as he highlighted the sloth in keeping citizens aware of the process.
Stabroek News reached out to Vice President Bharrat Jagdeo who also has responsibility for the sector for an update and he pointed this newspaper to Minister of Natural Resources Vickram Bharrat.
When contacted, Bharrat gave the assurance that he would have provided an update on Friday. However, repeated calls to his office and his mobile number went unanswered.
As Goolsarran pointed out, as per Annex ‘C’ of the Production Sharing Agreement with ExxonMobil, the US$460,237,918 amount it submitted to the then APNU+AFC government refers to costs incurred in petroleum operations pursuant to the 1999 Agreement up to 31 December 2015.
The Annex further stated that Exxon is to be reimbursed “such costs as are incurred under the 1999 Agreement between January 1, 2016, and the effective date which shall be provided to the Minister or on before 31 October 2016 and such number agreed on or before 30 April 2017.”
He noted that it is estimated that an additional US$500 million was expended during the period January 01 to June 26, 2016, giving a total pre-contract costs of approximately US$960 million to be charged as recoverable contract costs. This is in the light of the bridging agreement that links the 1999 Petroleum Agreement with that 2016 one.
He explained, and as was reported by this newspaper, the audit of the pre-contract costs was undertaken by the UK firm IHS Marketing and the related report was issued to the government.
“However, the results are yet to be made available to the public. In November 2020, the Commissioner-General of the Guyana Revenue Authority had stated that the report was handed to the Department of Energy to be forwarded to Exxon for its response. In January of this year, when the matter was raised in the National Assembly, the Minister of Natural Resources had stated that the audit remained incomplete,” Goolsarran pointed out as he called on the Irfaan Ali administration to make the document public or give answers as to why the process is stalled.
When the contract to audit post contract costs of over US$9 billion was signed with the RHVE consortium of local accounting firms in May of this year, the Minister of Natural Resources had said that the IHS Audit report was coming to completion.
He also said that the post-contract costs audit had to be signed before the IHS one could be closed as there needed to be some reconciling of expenses. “It is being completed. This one had to be signed first because there are some things, expenses that had to be looked at…,” he said.
ExxonMobil has told this newspaper that it is confident of its bookkeeping matters and transparency of the company. It added 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 said in response to questions from Stabroek News.