– Cabinet to review findings
By Kiana Wilburg
Kaieteur News – The Ministry of Natural Resources is set to conduct a thorough investigation into its Petroleum Unit regarding the mishandling of the audit into ExxonMobil’s US$1.7B bills for the period 1999 to 2017.
Vice President, Bharrat Jagdeo made this disclosure yesterday during a press conference at Freedom House on Robb Street. The oil sector’s primary decision-maker emphasised that the investigation aims to identify the individuals who engaged in an unauthorised reduction of US$214M in questionable spending by Exxon to US$3M.
Jagdeo said the ministry will provide a report to Cabinet for review and the appropriate action would be taken thereafter. The official also declined to disclose prior to the completion of this probe, the names of the persons that engaged Exxon. “I would want to await the full report from the ministry to Cabinet and the ministry would have to disclose that to the public too,” he said.
The Vice President said too that he agrees an investigation must take place, as was called for by Chartered Accountant, Christopher Ram and Opposition Parliamentarian, David Patterson. The call for a thorough probe was made after the Vice President revealed last week that the ministry’s unit engaged Exxon on reducing questionable spending first flagged by British Consultancy Group, IHS Markit and later endorsed by the Guyana Revenue Authority (GRA).
The official also set the record straight on concerns about GRA’s role in the audit of Exxon’s expenses. Chartered Accountant and Attorney-at-Law, Christopher Ram had noted in a letter to the press that GRA has no business being part of such audits which examine all the expenses Exxon used Guyana’s oil to cover. He argued that the governing legislation for GRA confines it to tax matters.
Ram also acknowledged that the Production Sharing Agreement (PSA) governing the oil-rich Stabroek Block states that the Minister of Natural Resources can carry out audits via a designated officer. Ram noted that while this is the case, the minister’s first choice ought to be the Audit Office, provided that it has the manpower.
Jagdeo clarified however that GRA is not acting outside of its remit on these matters. The Vice President explained further that when IHS was hired by the previous government to audit Exxon’s expenses totalling US$1.7B, a report was subsequently provided. He alluded that the document could not be accepted at face value; the findings had to be assessed. Jagdeo said the Ministry of Natural Resources does not have the capabilities to do that. GRA which has the expertise was therefore relied upon. “So policy wise, we said our advisor is the GRA…there is no conflict. The GRA and only that entity can advise on what we should conclude these matters on,” the Vice President said.
In keeping with its advisory role, the official said GRA wrote to the ministry on August 8, 2023, advising that it has no objection to the US$214M first flagged by HIS Markit and they should proceed to closing the audit. Jagdeo reminded that the ministry did not adhere to this recommendation and engaged in discussions with Exxon to reduce these sums.
The Vice President said the Head-of-State, Dr. Irfaan Ali was appraised of the developments and there was an agreement for a full investigation. He said too that the ministry now has to communicate to Exxon that based on the advice of GRA, the disputed sums will remain at US$214M. Importantly, Jagdeo said Exxon would not be pulled into the investigation. Jagdeo said, “We don’t know what they sent and I am not interested in what they sent because that could be used in arbitration should we go there. I am more interested in who authorized this and why.”
Going forward, he said there will have to be a policy which categorically states that ministry officials are not to engage with oil and gas companies without the explicit approval of the minister. “It is something that I intend to propose to Cabinet because we may never know what discussions actually took place between the oil and gas companies and staff at the technical level. So clearly there is a need for this,” the official concluded.
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