Guyana’s new Department of Energy (DOE) is stepping up its operations and has placed two key items at the top of its priority list. Head of the Department, Dr Mark Bynoe said in the short-term focus will be placed on the execution of ExxonMobil’s cost recovery audit – with the participation of the Audit Office of Guyana and the Guyana Revenue Authority – and the further review of the Petroleum Commission Bill.
“Clearly there are some issues that we have to address in the immediate future. Those will include providing assistance [to other Government agencies]. The idea is not for the department to do all of the work but it is to help those who have certain mandated responsibilities to do that work,” Dr Bynoe said during an exclusive interview with OilNOW on Wednesday.
He noted that while the Auditor Office of Guyana and the Guyana Revenue Authority are mandated to carry out the cost recovery audit for ExxonMobil and its partners, the DOE will carry out an oversight and coordinating function. “Ours is to coordinate…we are a coordinating entity with regards to oil and gas in the country…ours is to find the requisite financial resources so that these entities could look at the terms of reference and potential firms and we would help them recruit those firms. Getting the cost recovery started is one of the main things the DOE is focusing on,” he said.
The issue of cost recovery has been engaging a number of stakeholders who believe that Guyana must ensure that it is not stuck with upfront costs for which the country should not be responsible. The upfront costs to be audited amount to some US$460 million. Some have opined that the costs presented by ExxonMobil have been overstated by tens of millions of dollars and hence a careful audit is necessary. However, the company has said that the US$460M was spent on a range of activities and interventions which led to the world-class Liza discovery.
“Another issue we are focusing on is the review of the Petroleum Commission Bill of which President Granger said he would like to see a Green Paper done on this and circulated to the public before it is actually taken to the National Assembly,” Dr Bynoe said.
He said that notwithstanding the previous consultations on the Petroleum Commission Bill, further opportunity for public consultation was necessary in the spirit of transparency. He said some of the comments from the first round of review, including comments from the multilateral agencies, have been taken on board and will be incorporated as far as possible.
“The public with a fresh pair of eyes might see issues that are still arising and as had happened with the Sovereign Wealth Fund, we will take those issues on board and seek to ‘clean-up’ the document further before taking it to the National Assembly,” he said. Bynoe noted that it is the aim of the DOE that the revised Petroleum Commission Bill be taken to the National Assembly by first quarter of 2019. “Hopefully it can be passed, and the Commission become a live animal,” he said.
Cost recovery is important for all oil producing nations.