Responding to criticisms of his management in the wake of the unauthorised bid to reduce questionable expenses by ExxonMobil, Minister of Natural Re-sources, Vickram Bharrat on Tuesday cited his inexperience and that of the Head of the Petroleum Unit, Gopnauth ‘Bobby’ Gossai.
Speaking at a rare press conference, he said that it was a learning and growth process for him at a job he took up in 2020 and in which he endeavours daily to do his best.
And where the Head of the Petroleum Unit was blamed and penalized with a 15-day pay cut and a warning, Bharrat said that he won’t chastise his employee as he has been a diligent worker and asset to the ministry since his employ, and he likened his actions to inexperience and or exuberance.
The unauthorised engagement between Gossai and ExxonMobil sparked consternation as it reduced questioned expenses in an IHS Markit audit report from US$214.9m to US$3m, potentially stripping the country of US$106m in extra profits and raising concerns about undue influence by the oil company on the ministry.
“When you are criticized as a batsman or the bowler is after you, the best way to respond to the criticism is ensure you just go out, bat and keep batting and make as much runs as possible. So you answer the question without saying a word, and that is what I started to do when I took up my appointment,” Bharrat said on Tuesday, as he gave his views on the incident and criticisms he received as a result.
“I went through a lot of areas of the improvements in the Natural Resources sector, and it is under this very minister. Whether you make mistakes or not, or whether there was a mistake based on inexperience or exuberance or whatever the case is, I would not deny. Whether the mistake is fatal or not that is another question”, he added.
Bharrat said that although the error was made, it was government which also sought to correct it and it is the reason that the US$214m sum still stands today.
“There was an intervention by the very people [accused]. If we were, as some say, selling out the country or selling out to Exxon…I want to assure you that we, government, made that intervention to say we are not going to accept this reduction, because the consultant said something else…whether the discussion went on without our knowledge,” he posited.
“We don’t have a report to say – this is the amount you reduced it to – because obviously you need a report to substantiate what you are saying and there is no report to say [this] …the only report is the US$214m. That is why we made that intervention; that, no! It can’t happen and we are going to ensure that the right agency and not the Ministry of Natural Resources [is responsible for audit],” he added.
He said “The intervention was made by the government because we are elected to make sure we protect the rights of the people…that Guyanese get the true value for the resources and that is what we did.”
Bharrat lamented that since taking over the sector, there have been no words of encouragement from critics on the running of the oil and gas sector or on the policies implemented to protect the country’s patrimony, although it is public knowledge that it is a small staff that is tasked with great responsibilities.
Bharrat and his government have been lambasted for failing to establish a regulatory Petroleum Commission despite this having been promised three years ago.
Small and vibrant
For his “small and vibrant” team, he contended that they have worked diligently over the years and the local content secretariat establishment and its implementing of the local content laws among other jobs, were evidence of their hard work.
“This very small vibrant team is doing the work…”, he emphasized.
“I have not heard a single person come out [and applaud or encourage them], and sometimes we need to give them credit too and not just chastise them and bring them down for a mistake. It wasn’t fatal and it is why I said it was just a mistake. It could be inexperience. I was criticized for being inexperienced. I accept I am inexperienced. The sector is new. I may know more about forestry than oil and gas which is true but we are learning. All of us are learning. The media is learning too,” he added.
The Head of the Petroleum Unit lost 15 days’ pay and receive a warning over the unauthorized discussions with ExxonMobil that resulted in the disputed expenses figure being slashed from US$214.9m to US$3m.
In a statement which was also broadcast on social media, Bharrat had said: “… after examining all the facts it is clear that Mr. Gossai acted without the requisite authorization to engage EEPGL (ExxonMobil’s subsidiary) and provided inadequate advice and as such, I have asked the Permanent Secretary to take the necessary disciplinary measures”.
Many persons contended that the reprimand was a slap on the wrist for a transaction that could have resulted in Guyana losing US$106m in profits.
Critics had said that Gossai should have been the subject of a police investigation to determine exactly how and why he entered into unauthorized discussions with the US oil company. There were calls for an independent probe of the matter but none was done.
The Minister on Tues-day likened Gossai’s actions to inexperience and said he could not chastise him further or discredit the ministry’s team of employees, knowing that it was human error and possibly because the sector was a new one.
“I would credit it to inexperience but I would not go down the road to chastise or to discredit the team because it is a team at the end of the day. Bobby is responsible and that is why he was penalized but I want to say that the team has been doing well over the years so far,” he stressed.
In a statement when he announced Gossai’s culpability, Bharrat had said that he wanted to bring clarity on the issue surrounding EEPGL Stabroek Block Cost Recovery Audit for 1999 – 2017 period. He maintained that from the inception the Government of Guyana’s position has always been that the Guyana Revenue Authority (GRA) is the sole and final authority to determine the final outcome in relation to the audit.
The Ministry of Natural Resources’ role, he said, was to oversee the process of conducting the audit as per the Production Sharing Agreement (PSA), as well as, to facilitate the exchange of information and documentation among the relevant parties, including the GRA.
Bharrat said, however, based on advice from Gossai that the initial claim of US$214,911,994 was reduced to US$3,414,853.68, he wrote the Guyana Revenue Authority on 28th November, 2022 to confirm this figure by seeking a “No Objection”.
The Minister said that as recent as July, 2023 Gossai in a meeting with Vice President, Bharrat Jagdeo and himself, reported that the initial sum was reduced to US$11,497,140 then further down to US$3,414,853.68.
”Given that I had written the GRA since November, 2022 and it was established that the GRA’s involvement is necessary to finalize the audit, I was under the impression that the (reduced) figure was done in collaboration with the GRA,” the minister added.
The Minister said he subsequently learnt that the GRA did not agree with the position and the initial claim of US$214,911,994 remains the same.
“I wish to restate that the position of the Government of Guyana today remains consistent with its original position that the only authority to make a final determination is the Guyana Revenue Authority”, he stated.
He added that systems will be established to ensure no repetition of this lapse in the future. Also, staff members will be advised to make full disclosure with all contact and sharing of information with stakeholders in the sector.
Turning to claims that Gossai’s reprimand was “soft” because he was politically connected to the PPP/C, Bharrat rejected the assertions saying that the Petroleum Director was hired on merit.
“In terms of political protection…Mr. Gossai is not a member of the PPP. He wasn’t employed because he was a member. Himself and Martin [Pertab, Head of the Local Content Secretariat] studied in Aberdeen together. They were already employed in the sector. So as to political coverage, I don’t see any of that being given to anyone,” he stressed.
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 GRA wrote a letter to the Natural Resources Ministry saying that it wouldn’t challenge the US$214.9 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 various players to close deliberations.
Updating on the process, Bharrat on Tuesday repeated that the GRA was responsible for the process but that government believes the audit of oil expenses for the 1999 to 2017 period will come to an end soon.
“We are hoping the first audit will be concluded very soon. I think Mr. [Godfrey] Statia [Commissioner General of the GRA] has already made moves towards doing that. The second audit will follow the same procedure too,” he said.
