Latest update March 28th, 2023 12:59 AM
Feb 06, 2023 News
Four years later…
…Patterson says Guyana now at the mercy of oil company
Kaieteur News – As Guyana scales up its oil production activities and begins revelling in revenue from its newfound natural resource, the country has been struggling to keep up with the oil company’s spending.
Failure to keep watch on this crucial sector however can cost the country more than it may be benefitting. This warning has been sounded several times by international organizations but Guyana seems to have its attention elsewhere.
Presently, the nation is still in the review process of an audit that commenced since 2019 under the former A Partnership for National Unity + Alliance For Change (APNU+ AFC) Coalition.
This is so at least according to Natural Resources Minister, Vickram Bharrat. He told the National Assembly last week during the Consideration of Estimates for Budget 2023 that this process will “hopefully” conclude “very soon”.
The Minister explained, “They would have found that there was need to go back and to do some further work with the operator which was done and a final report has now been submitted and is being reviewed by all the relevant agencies (and) stakeholders, including the petroleum unit at GRA (Guyana Revenue Authority). Once that is over, we will conclude the first audit hopefully very soon.”
Shadow Natural Resources Minister, David Patterson told this newspaper in an exclusive interview yesterday that the response from Minister Bharrat is almost unbelievable. “It’s two years now since GRA said they would have completed their report and when I asked, I was told by the Minister that they (Government) sent it to Exxon for any comments they may have and that was since last year- it is now still outstanding.”
Patterson said he finds it strange that two years later, the review of Exxon’s pre-contract costs is yet to be completed.
The former Minister of Public Works was keen to point out, “Once again, we are at the mercy of Exxon, if they (government) don’t agree (to the costs), they can say, we don’t agree, but we can’t do anything about it because of these delays.”
On the other hand, he said it may be a situation where the audit has been completed but the administration is simply reluctant to release a report.
“I think that one of the reasons why we have this delay is purely because Exxon and the government do not want the government to know what really is happening,” he shared.
Patterson said that Minister Bharrat has now given assurance that the US$7.3 billion cost oil audit will be completed in March this year, but given the present circumstance, he is not very confident in this promise. That audit was to check bills handed to the country between 2018 and 2020.
According to Patterson, these critical reviews should be conducted at the end of every year, but the country is still lagging behind on five years of audits.
He said, “This is synonymous with the government’s whole management of the oil and gas sector. They have done nothing other than collect the money and use it. They have not stopped Exxon from flaring but they are content with just collecting a fine which is absolutely insane because Exxon is not allowed to do this anywhere else.”
In addition to flaring, Patterson said government has also failed to secure unlimited liability coverage in the event of an oil spill which can leave the country bankrupt.
“They have done absolutely nothing. They have just simply been sitting on their hands and allowing Exxon free reign in whatever area they want,” he argued.
In September 2019, the APNU+AFC regime had awarded a contract to a UK firm called IHS Markit to audit US$460M which ExxonMobil said it spent prior to 2015 for exploration works offshore Guyana.
But since the audit started to ascertain if this money Guyana has to repay is inflated, it appears that the nation is still stuck at the stage.
In March 2020, this newspaper reported that Commissioner-General of the Guyana Revenue Authority (GRA) Godfrey Statia has confirmed that he is in receipt of an initial audit report for the US$460M in pre-contract costs Guyana must pay to ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL).
Statia at the time said he was now examining the report, after which he will do his own internal work, and then have discussions with IHS Markit, the UK Company that was recruited to audit the billions of dollars ExxonMobil said it invested in the Stabroek Block.
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