Govt. failed to deliver on key promises – MP Patterson

Feb 05, 2025 News

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…cites renegotiation and petroleum commission promise, amendments to Local Content Law and finalising Exxon audits

Kaieteur News-Opposition Member of Parliament (MP), David Patterson, during the 2025 budget debate criticized the government’s management of the oil and gas sector and highlighted areas it has failed to deliver on.

Patterson asserted that the Ministry of Natural Resources’ Oil and Gas Unit has been largely inactive over the last budget cycle. “The Ministry of Natural Resources Oil and Gas unit, has been comatose over the last budgeting period, delivering nothing, simply operating on autopilot or awaiting the VP press conference for direction on how to proceed,” Patterson said.

Audits

MP Patterson pointed out that the first two audits of ExxonMobil’s expenses in Guyana are yet to be finalised, and the public remains uninformed about whether any funds owed by the oil giant have been remitted.

The audit, covering ExxonMobil Guyana’s US$7.3 billion Stabroek Block operations for 2018-2020, was conducted by local consortium VHE Consulting, comprising Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with international support from SGS and Martindale Consultants.

Kaieteur News had reported that an analysis of the initial second audit report revealed missing details on key expenditure that were covered in the first oil audit done, by British firm IHS Markit, of the company’s 1999-2017 expenses. IHS had recommended that the Government of Guyana (GoG) disallow US$214 million in costs being claimed by Exxon for the misuse of Guyana’s oil profits and failure to justify expenses. The first report, commissioned by the Coalition government, provided comprehensive data on significant costs, such as those for supply vessels, drill rigs, SURF, helicopter services, and waste management, while these details are notably absent from the audit report by the local consortium.

Notably, late last year, the auditors disclosed that the finalised version of the second audit was submitted to the government. The last update received on the second audit was that the government has supplied additional information requested by ExxonMobil regarding the finalised second audit report of the company’s expenses.

Petroleum Commission

Patterson further criticised the government for its failure to establish the long-promised Petroleum Commission, which was expected to oversee the sector’s regulatory framework.

May 2025 will mark 10 years since Guyana is without an updated legislative and regulatory framework that is essential for the protection of the oil industry against mismanagement and corruption. One of the key regulatory architectures that remains in limbo is the Petroleum Commission Bill that would pave the way for the appointment of an independent regulator. At the beginning of its term, the People’s Progressive Party Government described the Commission as a priority.

However, the Irfaan Ali led-administration is in their fifth year and is yet to deliver on that promise.

Review of Local Content Law

Moreover, Patterson noted that the revision of the Local Content Act, which was meant to address loopholes previously highlighted by the opposition, has not yet been tabled.

Guyana’s Local Content Act was enacted in 2021, however, certain loopholes were identified and the government had announced their intention to amend the law. Last year, Vice President Bharrat Jagdeo said that the law will be amended in 2025 to address loopholes, strengthen compliance and add new areas to the local content schedule.

Renegotiate Exxon deal

Patterson accused the PPP-administration of not fulfilling its manifesto commitment to renegotiate the existing Stabroek Block contract.

He said, “The PPP are very comfortable with the “do nothing approach”, while the oil resources of our country is being squandered away.”

The Stabroek Block deal was signed by the previous APNU+AFC government which Patterson was a part of. The deal agrees for ExxonMobil and its partners, Hess and CNOOC to pay Guyana a 2% royalty on oil revenues, allows for the oil companies to recover 75% of the revenue to cover cost before the remaining goes to profit-sharing, and caters for Guyana to cover the oil companies’ taxes.

The contract has been widely criticised for giving the oil companies a tax-free ride, the high-cost recovery rate and lack of ring-fencing provision. This has led to calls for renegotiation from various quarters. However, the People’s Progressive Party government has maintained that it will abide by the terms of the deal.

President Irfaan Ali and the PPP current stance contrasts with statements Ali made as the PPP/C presidential candidate. During an interview while running for president back in March 2020, Ali had strongly criticised the PSA signed by the Coalition Government with ExxonMobil.

He stated at the time, “We have made it very clear, and we can never agree, how could, how could, I don’t think any Guyanese agree with this, no Guyanese except the government that is defending it. We have made it very clear that we have to go towards, we’re looking at these contracts, renegotiating these contracts, looking at contract management and all of these things. Everything we have to relook at because we have to ensure that our country does not get the wrong end of the stick.”

(Govt. failed to deliver on key promises – MP Patterson)

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• Audit, budget 2025, David Patterson, Irfaan Ali, renegotiation

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