Recent media reports have zeroed in on what was purported to be the final findings from an IHS Market audit of ExxonMobil’s 1999-2017 costs for its Stabroek Block operations.
But Commissioner General of the Guyana Revenue Authority (GRA) Godfrey Statia has said that the “leaked” document is the interim audit report, and not the final one, which is still being reviewed.
“The GRA and the MNR [Ministry of Natural Resources] continue to actively liaise and review the “Final” Audit Report and all Subsidiary Reports for the period 1999 to 2017,” Statia said in a statement.
The GRA Head refuted claims that the report was “kept hidden for two years” and gave a detailed account of the audit process upon contract signing.
Statia explained that IHS Markit was expected to deliver the Initial Audit Report, the Intermediate Audit Report and the Final Audit Report. IHS Markit submitted the first on March 20, 2020, which was then reviewed by the relevant government agencies and sent back to IHS Markit so the audit process could continue.
“A period of intense auditing followed which led to the development of various detailed Audit reports for each key work stream. On July 31, 2020, IHSM submitted a compiled report which they referred to as the ‘Final Audit Report’, along with the reports for each work stream. The Fiscal Impact Assessment was also submitted by IHSM,” the GRA Head said.
But Statia explained that there was a “breach of contractual term, audit standards and good practices” by IHS Markit as the final report could not have been completed without a written report from Exxon.
He said that “two iterations” of the report were then issued by IHS Markit and in both reports “major deficiencies” recurred.
- The Lack of recommendations in the report;
- Failure to refer to Industry standards and good practises for specific findings
- Inaccuracies as it relates to analysing and reviewing the financials
- General inconsistencies and deficiencies
- Failure to adopt suggestions and recommendations, as well as, address concerns emanating from Government of Guyana Representatives
According to Statia, Exxon received the report in July 2021 and as of November 2022, the final document was received and is still being reviewed.
“Upon completion of its review, its findings shall be made public,” he pointed out.
“It is therefore mischievous and misleading to intimate that the Government of Guyana has not been actively pursuing closure of the audit and by extension the necessary adjustments to the Cost Bank. It is also reckless and unnecessarily inciting for a known and reputable news outlet to feature and quote a leaked and unvalidated document, without seeking a response from the responsible parties,” the GRA statement continued.
The Vice President, Dr. Bharrat Jagdeo also vented his dissatisfaction with the claims made. He said, “The report has been with the staff of the Ministry [of Natural Resources] and the GRA [Guyana Revenue Authority] and all their technical people for the last several years. It is not hidden. Nobody is hiding the report.”
The IHS Markit audit was sanctioned by the former APNU/AFC government. When the VP’s administration took office, it sanctioned the second audit of Exxon’s expenses – from 2018-2020. This is being done locally, by a consortium 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.
Once an audit is conducted, Guyana will be able to review the expenditure being incurred by Exxon and make adjustments if there is compelling reason to do so. The VP had said that the government has the authority to strike out from cost oil, expenses that appear to be inflated, thereby securing a higher profit share for Guyana.