Aug 03, 2021 News
– But still to release critical reports
By Kiana Wilburg
Kaieteur News – After being sworn into office on the heels of a most tumultuous General and Regional Elections in 2020, the President, Dr. Irfaan Ali, had pledged that transparency would be one of the key hall marks in the oil and gas sector. But after one year of being in office, a noticeable information deficit still persists.
To date, Guyanese have not seen a single Local Content Report which ExxonMobil submits to the government on a quarterly basis, production reports on the Stabroek Block have not been released, and the report on the audit of US$460M ExxonMobil claims was spent pre-2015 in search of oil remains cloaked in secrecy. Also hidden from the public’s eye despite a promise that it would be released, is a report that was done by Canadian consultant, Alison Redford. The former politician who is tainted by scandals regarding the misappropriation of tax dollars had spearheaded the review of the Field Development Plan (FDP) for ExxonMobil’s US$9B Payara project in the Stabroek Block.
When asked to say when Guyanese can expect to see transparency on the foregoing matters, Ali during a virtual engagement with the press yesterday said, “I do not believe that we have been hiding anything as it relates to the oil and gas sector. Every piece of information that the government has, every discussion we have had, any change in any agreement, it has been shared with the public.”
Ali continued, “Many of the areas you outlined, the government itself is identifying technically competent support staff that would come on stream with us in the new structure we are designing for the sector to do the analysis in all the areas you have outlined and to present their findings to the population.”
The Head of State added, “We recently advertised for various posts within the unit and it is our hope that very soon, we can put together the structure and the team to further enhance our work in having an open and transparent system of management and information sharing in the oil and gas sector.”
Ali said too that his government is currently working on a website, which would house all the production, expenditure, and revenue collection details on the oil sector. He gave no timelines for when this would be completed or when the reports Kaieteur News enquired about would be released.
EXXONMOBIL’S LOCAL CONTENT REPORTS
Since assuming office, neither the President, nor his Vice President, Dr. Bharrat Jagdeo, has ensured the release of ExxonMobil’s local content reports despite calls by this newspaper and other stakeholders.
In fact, yesterday made one year since the Ali government has been in office and the public is none the wiser about the ExxonMobil’s true performance on hiring and training locals and using indigenous products and services for the period 2016 to 2021. These reports which are yet to be seen by the public are produced in accordance with the 2016 Production Sharing Agreement (PSA) that was signed for the Stabroek Block. Article 18 of the PSA specifically states, “Within 60 days prior to the beginning of each year or part thereof as applicable, the Contractor and the Minister shall provide a yearly plan for the utilisation of qualified Guyanese resources for the upcoming year. Following the submission of the plan, the Contractor and the Minister shall meet to discuss and consider the effectiveness of the plan.” Since being in office, the PPP/C Administration has said nothing about its engagements with ExxonMobil on this front, especially as it relates to the local content utilisation plan for 2021.
Article 18 goes on to state, “The Contractor shall provide half-yearly reports submitted within 30 days after the end of each half-year to the Minister outlining its achievements in utilising qualified Guyanese resources during the previous half-year and make appropriate adjustments to the yearly plan to better accomplish the goal of increasing the qualified resources available for use by the Contractor in its Petroleum Operations and other entities performing petroleum operations in Guyana.”
To date, neither the Head of State nor the Vice President has disclosed these reports for the public to peruse and hold the oil companies accountable. Neither has also informed the nation about whether they reviewed previous local content reports submitted by Exxon and partners and whether those were satisfactory and in keeping with the PSA’s call for increased use of Guyanese services and skills.
US$460M PRE-CONTRACT COSTS
Upon reviewing reports pertaining to the audit of US$460M ExxonMobil claimed was spent prior to the discovery of oil in 2015, a reliable source during a recent interview with this publication, deemed the findings to be “an abomination”. In fact, the source urged this newspaper to challenge the government to make the audit report public, as it would expose how many loopholes have been left unaddressed.
Kaieteur News used the opportunity yesterday to do this but the President did not say when the report would be released.
This publication had previously reported that the audit of the pre-contract costs was done by IHS Markit, a British firm, at a cost of US$300,000 ($62.6 million) in 2019. The contract had to be extended in May 2020 at no cost, due to the COVID-19 pandemic. At the time, former Head of the Energy Department, Dr. Mark Bynoe, had said this was mainly due to flight restrictions.
Following the audit, a final report was awaiting comments from ExxonMobil for some time but those have been received. The source had said it is quite saddening, especially in the interest of transparency and accountability, that the government has been silent about the results thus far.
The reputable industry stakeholder who is also a trusted advisor to the administration further noted that the political opposition should utilise the powers of special select committees on natural resources to demand answers on these audits which will cost Guyanese taxpayers billions of dollars.
The government advisor further questioned, “If these reports are not made public, how else will the Guyanese people know that the company selected for these audits did their job and gave the country value for money? How else will the public be able to have confidence that the government can be trusted to be a prudent overseer?”
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