Monday, March 27, 2023

Final audit report on Stabroek Block costs due in March – Bharrat

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An audit, launched in May 2022 of Stabroek Block costs submitted for the period 2018-2020, is due to wrap up in March this year, Guyana’s Minister of Natural Resources, Vickram Bharrat said Tuesday.

There was a misconception, Bharrat explained, that a 120-day period stipulated in the audit contract, meant the audit would be wrapped up in four calendar months. So, when September came and there was no word on the completion of the audit, the government was criticised, with some worrying that it was not managing the audit with alacrity.

During a hearing in Parliament, Minister Bharrat clarified that the period is 120 working days which, to his projection, meant the final report for the audit was due much later than September. Even so, there has been a slight delay, and the date for submission of the final report is sometime in March 2023. The Minister said the auditors have submitted an initial report, which is being scrutinised by the relevant regulatory bodies, including the Petroleum Unit of the Guyana Revenue Authority (GRA), the country’s tax and customs administrator.

A local consortium was hired, consisting of Ramdihal and Haynes Chartered Accounting and Professional Services Firm, Vitality Accounting and Consultancy Inc., and Eclisar Financial & Professional Services. They are partnered with the Oklahoma-based Martindale Consultants Inc. and the Swiss technical company, SGS, the project lead.

Bharrat explained last May that the contract includes a local content aspect – a requirement that the expert foreign firms upskill their Guyanese counterparts. In fulfillment of this, the Guyanese consortium sent auditors and accountants to Oklahoma and Houston for capacity building. The idea, Bharrat said, is for the locals to one day take the reins and conduct the cost audits on their own. He said this would help Guyana to monitor costs at a more efficient pace. Guyana has so far been “playing catch-up”, according to some critics, as a late start to these audits meant reviews are being done on costs submitted years ago. The Minister said the government hopes to be able to conduct these audits with no more than a year’s delay.

Bharrat said a petroleum account is being managed by the Guyana Geology and Mines Commission (GGMC), in which the government places audit fees payable by international oil companies (IOCs) as part of obligations in their production licenses.

Transparency advocates have pushed staunchly for capacity building so Guyana can monitor petroleum operations on its own, including cost recovery claims. ExxonMobil has embarked on massive exploration and development projects offshore Guyana, with costs at magnitudes to which Guyana is woefully unaccustomed. Authorities insist that cost audits are among their priorities.

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