Jan 21, 2020 Letters
Recently, it was reported in the press that the government has hired a United Kingdom firm to audit the pre-contract costs. The firm, IHS Markit, would be paid US$300,000 to perform the audit. How are we enabling Guyanese such that we don’t perpetually keep hiring foreign firms to perform audits?
One has to assume that most of the work by IHS Markit would be conducted offshore. The Stabroek PSA was signed with Guyanese oil companies, but those companies are a façade to shell companies in the Caribbean. The oil companies with the expertise to extract the oil have two walls to shield them from liabilities.
Do we believe the pre-contract expense-records submitted to the auditors were created in Guyana? No, likely these records were created offshore. Hence, we are having one foreign firm audit another set of foreign firms.
How are we pruning these foreign firms to ensure their interests are aligned with ours? Do the foreign firms we engage also have the oil companies as clients? If so, then these firms would have a conflict of interest. We should be hiring foreign firms that have a proven track record of acting in the best interests of developing countries like Guyana versus multinational oil companies.
For the pre-contract cost audit, Guyanese will be part of the process. But will they just be part of daily summary briefings? Or, will they be engaged in the day-to-day operations to learn the finer points of the work?
If Guyanese participants don’t have the educational background of the foreigner auditors doing the work, how will they be brought up to speed in the 4-month period of the pre-contract cost audit? If teachers determine that students can’t count, it would be pointless to have them participate in a class verifying the results of calculus equations.
Recall, that Exxon deleted some of its CEO’s emails before August 2015. What other records did it delete before 2015? Do we know if the pre-contract cost audit includes the verification of the authenticity of expense records dating back to 1999? If not, then it seems to diminish the value we are getting for our US$300,000.
Since the anomalies of the pre-contract costs came into question, have we requested the oil companies to submit their expenses such that we can record and verify them as they occur?
With the audit of the pre-contract costs, we are in reactive mode handing out lucrative purses to foreigners to help us claw back funds. Are we going to hire another foreign firm to help us resolve the US$1 billion discrepancy between Liza 1 and Liza 2? What is our strategy to break this cycle?
How are we enabling Guyanese to build up their experience to ensure we are not perpetually paying foreigners to free us from the handcuffs of other foreign firms? It appears that the crumbs we will receive from the oil contracts is starting to be showered onto foreign entities without a broad strategy to enable Guyanese to competently perform these tasks in the future.
Darshanand Khusial on behalf of OGGN
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