As of recent the role of the Guyana Revenue Authority (GRA) in auditing ExxonMobil’s operations in Guyana has been the source of some debate.
Mr. John Seeram wrote recently that the Auditor General should be the one conducting the audit of ExxonMobil’s pre-contract costs while Mr. Christopher Ram, in his September, 6, 2018 letter raised doubts that the GRA can “properly, legally and meaningfully,” audit the operations of the exploration company.
The latter is of the view that the GRA has no jurisdiction over the Petroleum Agreement or to demand returns from the oil companies, since the obligation to submit those returns rests with the Minister.
Without a doubt, I have utmost respect for these two gentlemen, both of whom are experts in their respective fields, and both of whom I have had working relationships with. However, I need to draw their attention to Section 6.2 of the well-publicized Petroleum Agreement which provides that “the Minister of Government may delegate to Other Government entities to perform these or any other duties and the Contractor shall fully comply with such lawful delegation upon ninety (90) days written notice from the date of receipt of such notice.”
These duties entail reviewing any proposed exploration work programme and budgets presented by the contractor; review any development plan submitted by the Contractor in accordance with an application for a petroleum Production licence; ensuring the accounting procedures are followed; ensuring compliance with the provisions of this Agreement, the Petroleum Act and Regulations..”
The GRA as an agent of the Government for the purposes of tax collection, is therefore acting as a lawful delegate. Further, both men are aware that the Authority has been putting in place the necessary infrastructure and professional staff to deal with this activity. Matter of fact, it is Mr. Ram who stated months ago that while he does not doubt the GRA’s intention, the government was giving “Statia basket to fetch water.”
As Commissioner-General I am confident in the ability of the GRA to undertake this task and get this job done. I trust that this lends some clarity to the never-ending debate of the Audit of petroleum activities.
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