Why are the ExxonMobil-Guyana cost audits taking so long? Jagdeo weighs in

Must Read

OilNOW
OilNOW
OilNOW is an online-based Information and Resource Centre

Recent relations between ExxonMobil and the Guyanese government have gained momentum in resolving cost disputes, according to Vice President Dr. Bharrat Jagdeo. This news follows prolonged negotiations and document submissions, in an auditing process which, according to Jagdeo, has boiled down to the adequacy of documentation. 

The audit concerned US$1.6 billion of costs associated with expenditures made in the period 1999-2017. He revealed that initial findings of over US$200 million lacking sufficient validation were eventually narrowed down to US$11 million after supplementary documentation was submitted.

The Ministry of Natural Resources, through a website update, highlighted that it is working hand-in-hand with the Guyana Revenue Authority (GRA) to expedite the closure of this matter, as well as a second audit, which concerns more than US$7 billion in 2018-2020 expenses.

“The lessons learned from these processes will be adopted and applied for the 2021 to 2022 audit of the Stabroek Blick and other offshore operations of the Guyana Basin,” the Ministry stated.

A pervasive issue for critics has been the time taken to conclude the audit processes, which have gone beyond expectations. One notable obstacle to the swift conclusion of the audit process is the iterative nature of document submission and review, the Vice President noted. Addressing queries on why the cost audits take so long, Jagdeo elaborated that the primary hindrance is the repeated requests for adequate documentation. 

Guyana to employ strict justification guidelines to monitor cost overruns on oil projects | OilNOW

The Vice President emphasized the necessity of this detailed scrutiny. “We’re allowing the technical people to work that through, and we are reluctant to get in and say all right, accept that or don’t accept that, because then that’s a judgment call by a politician and it should not be.”

Answering a pointed question about the financial implications of the extended audit period, Jagdeo confirmed that the longer duration inevitably results in increased expenses for the government. On the topic of future audits, he noted the challenges in shortening the audit timeline. While the possibility of hiring more auditors is on the table, the iterative nature of the audit, which involves a continual exchange of documents, is a time-consuming process.

Guyana tax regulator boosting capacity for oil audits | OilNOW

During an August 24 press briefing, the Vice President responded to claims made by Opposition Leader, Aubrey Norton, emphasizing the government’s commitment to building local audit capabilities. Norton had said during his own briefing that the government’s challenge upskilling and keeping qualified auditors in the public service, is a failure on its part and an indication that it does not care. 

Jagdeo ardently refuted Norton’s allegations, stating that the government is fully dedicated to capacity building. “We delayed this audit a few months by trying to bring the locals in to do the audit, and I was personally vilified, that we are bringing people in who don’t have the expertise et cetera, and we had to stick to our guns… we involved the locals in the audit and it came out well. We are building capacity.”

- ADVERTISEMENT -
spot_img

Partnered Events

Latest News

S&P sees Guyana’s oil production tripling in value to US$33 billion by 2030

Guyana’s annual oil exports are expected to triple in value from US$11 billion in 2023 to US$33 billion by...

More Articles Like This