GEORGETOWN, Guyana, CMC – The oil and gas company ExxonMobil says it is awaiting “ a formal response” from the Guyana government amid the controversy that has erupted here over a reduction in its audited US$214 million expense.
Vice President Bharrat Jagdeo has called for an investigation to determine why the Ministry of Natural Resources (MNR) went ahead and negotiated a reduction in ExxonMobil’s audited expense.
Jagdeo, who maintained that the Guyana Revenue Authority (GRA) is the sole agency lawfully mandated to audit the expenses, said the investigation should determine why the MNR went ahead and negotiated a reduction to as low as three million US dollars.
“No money has been stolen. Somebody has to explain how they engaged with Exxon,” he told a news conference, adding, “We believe there should be a full investigation, but we have not completed the audit; the ministry has to write Exxon now.
“… I also believe that we have to have a policy where people, at the technical level particularly, who engage with the oil and gas companies and executives, that they must seek the explicit clearance from the ministry and they must report back on the nature of every engagement,” Jagdeo said.
But in its statement, ExxonMobil said auditing an oil and gas joint venture operator’s expenses is a standard process by co-venturers and governments to ensure only appropriate costs are charged.
“It’s normal for auditors to highlight focus areas by sharing a draft report that is later addressed with additional documentation. Our experience is that typically, very few, if any, costs are ultimately rejected, reflecting the integrity and quality of our accounting activities.”
The oil and gas company said the Guyana government has audit rights under Article 23 and Annex C of the Stabroek Petroleum Agreement.
“We have acted in good faith and co-operated with the Government and their consultants appointed for the cost recovery audit of the 1999-2017 years.
“We have supplied responses and documents to the issues raised in the draft audit report prepared for the Government by their consultant. We now await a formal response from the Government, after which we will enter into further dialogue as necessary,” it said in its statement.
Last week, the main opposition, A Partnership for National Unity and the Alliance for Change (APNU+AFC), called for Jagdeo to be relieved of his portfolio of Oil and Gas.
The opposition said this is necessary after the Petroleum Unit at the Natural Resources Ministry cut the US$214 million in questionable expenses incurred by ExxonMobil for its exploration of the Stabroek Block to three million US dollars.
Last week, the Natural Resources Minister, Vickram Bharrat, said he supports that the GRA is the competent authority to lead all audits for expenses incurred by ExxonMobil Guyana Limited and other oil companies operating here.
Bharrat has said he stood by the GRA’s no-objection to the US$214 million in disputed costs flagged by the British-based IHS Markit in its audit of ExxonMobil’s US$1.7 billion expenses from 1999 to 2017.
He said then that the Natural Resources Ministry needed to engage Exxon when GRA had already submitted its report.
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