GUYANA-Government says officials to be disciplined for negotiating expense reduction with ExxonMobil.

GEORGETOWN, Guyana, CMC – The Guyana government says a senior official of the Ministry of Natural Resources who “acted without the requisite authorization” is to be disciplined as the controversy that has erupted here over a reduction in the audited US$214 million expense of the oil and gas company, ExxonMobil.

Natural Resource Minister Vickram Bharrat, in a statement issued late on Thursday night, said that the official had asked the Permanent Secretary to take the necessary disciplinary measures against the employee, Gopnauth Gossai.

Bharrat said that from its inception, the Government’s position has always been that the Guyana Revenue Authority (GRA) is the sole and final authority to determine the outcome of the EEPGL Stabroek Block Cost Recovery Audit for the 1999 – 2017 period.

He said the Ministry of Natural Resources’ role was to oversee the audit and facilitate the exchange of information and documentation among the relevant parties, including the GRA.

“However, based on advice from Mr. Gopnauth Gossai that the initial claim of USD$214,911,994 was reduced to USD$3,414,853.68, I wrote the Guyana Revenue Authority on 28th November 2022 to confirm this figure by seeking a “No Objection,” Bharrat said.

He said that as recent as July 2023, Gossai, in a meeting with him and Vice President Bharrat Jagdeo, “reported that the initial sum was reduced to USD$11,497,140 then further down to USD$3,414,853.68.

“Given that I had written the GRA since November 2022 and it was established that the GRA’s involvement is necessary to finalize the audit, I was under the impression that the reduced figure was done in collaboration with the GRA.

“I subsequently learned that the GRA disagreed with the position, and the initial claim of USD$214,911,994 remains the same.

“The position of the Government of Guyana today remains consistent with its original post that the only authority to make a final determination is the Guyana Revenue Authority.

“Therefore, after examining all the facts, it is clear that Mr. Gossai acted without the requisite authorization to engage EEPGL and provided inadequate advice, and as such, I have asked the Permanent Secretary to take the necessary disciplinary measures.”

Bharrat said that further systems will be established to ensure no repetition of this lapse in the future.

“Also, staff members will be advised to make full disclosure with all contact and sharing of information with stakeholders in the sector,” he added.

Last month, Bharrat had 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 in expenses incurred for the period 1999 to 2017.

Late last month, ExxonMobil said it was awaiting “a formal response” from the Government amid the controversy.

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.

On Thursday, speaking at a news conference, Jagdeo said the Ministry of Natural Resources has submitted the findings of its investigation into the audit.

“As soon as that matter is completed at the cabinet level, the President (Irfaan Ali) will address it. But the report has been submitted to the cabinet, and discussions began earlier today. So, we are taking it seriously,” Jagdeo said.