ExxonMobil yesterday steered clear of addressing how it entered into discussions with persons not authorised by the Government of Guyana concerning the US$214 million in questionable expenses cited in an IHS Markit audit report but stated that it acted in “good faith” and cooperated with consultants.
“We have supplied responses and documents to the issues raised in the draft audit report prepared for the Government by their consultant (IHS Markit). We now await a formal response from the Government, after which we will enter into further dialogue as necessary,” the company statement said.
Stabroek News had on Tuesday formally reached out to the company seeking answers to a number of questions on the matter. Its Public and Government Affairs Advisor, Kwesi Isles had on Thursday said that he was awaiting a “sign off” on a response to the email sent.
However, yesterday afternoon the company issued a statement to the public but did not address key concerns such as how it engaged in unauthorised deliberations with the Ministry of Natural Resources.
“Auditing an oil and gas joint venture operator’s expenses is a standard process by co-venturers and governments to ensure only appropriate costs are charged. It’s normal for auditors to highlight focus areas by sharing a draft report that is later addressed with additional documentation. Our experience is that typically, very few, if any, costs are ultimately rejected, reflecting the integrity and quality of our accounting activities,” the statement said.
“The Government has audit rights under Article 23 and Annex ‘C’ of the Stabroek Petroleum Agreement. We have acted in good faith and co-operated with the Government and their consultants appointed for the cost recovery audit of the 1999-2017 years,” it added.
On Thursday, Vice President Bharrat Jagdeo disclosed that President Irfaan Ali has ordered that an investigation be swiftly conducted to determine who authorised personnel at the Ministry of Natural Resources to bypass advice from the Guyana Revenue Authority (GRA) and enter into direct negotiations with ExxonMobil to reduce US$214 million in questionable claims flagged by IHS Markit, to US$3 million.
“I spoke with President Ali and I agree that there should be a full investigation of this matter and the Minister [of Natural Resources] still has to give a full report to the cabinet on what took place,” Jagdeo told a press conference.
He added, “Somebody has to give explanation how they engaged with Exxon and we have to have a policy with people who are at the technical level, and who engage with executives, that they must seek explicit clearance from the Ministry and report back on the nature of the engagement; almost a Disclosure Policy.”
Stating that the investigation will be detailed and that he will disclose the names of the persons who were involved, Jagdeo said that while Minister of Natural Resources, Vickram Bharrat has direct oversight, he has also said that he did not know that the US$3 million figure was not given by the GRA but his own staff.
“I would await the full report. Then we will be able to identify who all the people are with Exxon and when [those meetings] took place,” he stressed.
As for the US oil major that has had global accusations about duplicity levelled against it, the Vice President said that government was not accepting any documents or explanations where the agreement came from the ministry’s technical staff. “We are not accepting anything Exxon sent, subsequent to the closure by the GRA. We don’t know what they sent and I am not really interested in it. I am more interested in who authorised this and why they did, after the GRA said we are closing at this stage,” he stressed.
UK firm IHS Markit had been hired to do the first ever audit of expenses of ExxonMobil and its partners for the period 1999 to 2017, and up to April 2nd this year the report was kept hidden until Stabroek News published the details. In the six months that followed there were attempts by the government and ExxonMobil to cut the figure but that apparently ended when the Guyana Revenue Authority (GRA) wrote a letter to the Natural Resources Ministry saying that it wouldn’t challenge the US$214 million figure and recommending that the audit be closed. That letter was also revealed to the public by Stabroek News and appeared to have forced the government to close deliberations.
Last week Shadow Minister of Natural Resources, David Patterson, told Stabroek News that ExxonMobil Country Manager, Alistair Routledge, informed the Opposition that the government had accepted that the US$214 million sum found by the IHS Markit audit would be reduced to US$3 million, statements contradictory to government’s position on Thursday that it had accepted that the company overstated their expenses by the US$214 audit sum.
“They said they had completed it and they had resolved the audit issue. I went in thinking it was reduced to US$11 million but Routledge said it has been reduced to US$3 million. I was shocked. I asked him if he was sure and to confirm it. He said yes,” Patterson told Stabroek News in an interview.
“He also said they could have been reduced further because they have all their record boxes. Boxes and boxes of records, but it was time consuming so they and the government said, it was a waste of energy and manpower trying to do that [sort the boxes of documents] and they agreed to the US$3 million sum”, Patterson added.
