Govt. shuts out media from signing of third audit of Exxon’s expenses 

Oct 28, 2024 News

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– AFC says ‘secret’ signing an attempt by Govt. to dodge scrutiny

 

Kaieteur News – An audit of ExxonMobil’s US-multibillion dollar expenses, incurred between the period 2021 to 2023, was awarded to the local consortium VHE Consulting on October 10. With the surprise announcement by the National Procurement and Tender Administration Board (NPTAB), Chairman of the Alliance For Change (AFC) and former Minister of Public Infrastructure, David Patterson is of the view that the media was blanked on purpose from attending the signing ceremony.

 

 

In a recent interview with this newspaper, Patterson said, “We noted that the contract signing was done without the presence of the media, departing from earlier such contract signing. We see this as an attempt by the government to dodge questions on the performance of the company, as well as the contents of their report.”

On May 24, 2022 the Government of Guyana (GoG), through the Ministry of Natural Resources awarded a contract for a four-month review of ExxonMobil’s expenses between the years 2018 to 2020. VHE Consulting which is a locally registered partnership between Ramdihal & Haynes Inc; Eclisar Financial; and Vitality Accounting & Consultancy Inc had won the contract and subject Minister, Vickram Bharrat was faced with a plethora of questions from the media on the process and next stages following the completion of the review.

On this occasion however, journalists were not afforded that opportunity even as questions linger concerning the completion of the two previous audits. The first audit for Exxon’s pre-contract costs, during the period 1999 to 2017 was awarded to a British Consultant, IHS-Markit. That audit of US$1.6B found over US$214M in questionable costs claimed by the contractor.

The second audit which was awarded to VHE however only found less than US$100M in disputed charges for the period 2018 to 2020.

To this end, Patterson argued, “There has been no public announcement on if Exxon has agreed with the results of the previous audit results, and if they were in agreement, what sums have been remitted to the people of Guyana, and where has these funds been deposited.”

It should be noted that Vice President Bharrat Jagdeo previously signaled that the country is prepared to head to arbitration over the $214M sum flagged by the auditors.

With the final audit report revised and handed over to government on the first audit since March 2021, the Member of Parliament (MP) pointed out that some three years and seven months later, there is closure on that process.

He said, “To date, there has been no update on the proposed arbitration between the government and Exxon on the disputed US$214M. What is the status of this issue? Has the money been deposited into an interest-gaining escrow account awaiting the outcome of this arbitration process?”

Meanwhile, shifting his attention to the second audit by VHE Consulting, the MP noted that the final audit report previously executed by the consortium has not been officially released. Patterson reasoned, “This is some more than 18 months after it was due to be completed. It appears that both Exxon and the government were satisfied with the report, since another contract has been signed with the same company. However, by not officially releasing the audit, stakeholders are unable to scrutinize their performance.”

Award of third audit

On October 15, Kaieteur News reported that NPTAB announced the award of the third audit to VHE Consulting. According to Tender Board’s website, the audit will cost $312,642,834. The audit services is a project being undertaken by the Ministry of Natural Resources which had issued a tender earlier in the year for ‘Consulting Services for Cost Recovery Audit and Validation of the Government of Guyana’s Profit Oil share for the Period 2021 to 2023’.

The project was initially opened back in March and VHE was among Grant Thorton UK LLP and PKF Barcellos Narine & Company; and M. Sukhai & Company (local) in joint venture with Info Works Solutions Ltd who had submitted bids.

The Terms of Reference (ToR) indicated that the successful consultant is required to conduct a pre-audit analysis; devise an effective audit plan inclusive of an appropriate methodology; execute the audit in adherence to the provisions of the Stabroek Block Petroleum Agreement and applicable local laws, regulations and procedures as well as international good practices and standards.

The scope of works also includes conducting verifications of the crude oil valuation pursuant to the provisions of the petroleum agreement for the audit period as well as verifying royalties remitted to the government for the said period.

Additionally, the selected consultant will also be required to validate the accuracy of the total government share of petroleum for the period under review, and assessing the impact of the audit on future profit oil revenues.

 

(Govt. shuts out media from signing of third audit of Exxon’s expenses)

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• expenses, NPTAB, Patterson, secret award, third audit, Vickram Bharrat

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