Home News 5 firms shortlisted to conduct cost oil audit – Statia
Oil and gas sector
– Canadian consultant to help GRA build capacity
By Jarryl Bryan
A total of five audit firms have been shortlisted from a pool of 14 applicants vying to conduct audits into the over US$400 million in cost oil claims submitted by oil giant Exxon Mobil to the Government.
This was revealed by Guyana Revenue Authority (GRA) Commissioner General Godfrey Statia during a recent press conference in which he provided updates on prior year matters and the Authority’s efforts to build capacity for the oil sector.
He referenced the World Bank US$35 million Development Policy credit to Guyana, noting that money from this will enable the Government to procure the services of the accounting firm to do the cost oil analysis. Statia also revealed that Exxon has been co-operating with the Authority.
“We have so far shortlisted five of those firms, out of 14,” Statia said. “It has since been sent back to the World Bank and they should send in their proposals and we should pick one of those proposals and we move ahead. In the meantime, I want to assure you that we have been getting information that we requested from Exxon on a quarterly basis.”
“And we’ve been getting information going forward. They’ve been estimating their information going forward. That information will allow us to see their rate of return and whether there should be some tweaking and the emphasis we should put on some of these issues.”
When it comes to developing the administrative capacity for oil and gas at GRA, Statia revealed that a Canadian expert in the area of petroleum taxation will be brought on board to assist.
“I’m happy to say that we have been able to procure the services of an expert, who was in charge of the Canadian Revenue Authority oil and gas operations. He’ll be here for the next two years, for a maximum of 30 weeks every year.”
“He would be in charge of building that capacity based on what we would have had to do. So basically we’re going to spin that off, from the large taxpayers unit and we’ll have a full-fledged oil and gas unit,” Statia said.
After its 10th discovery of oil in the Stabroek Block, ExxonMobil has estimated the recoverable resource in the block to be 5 billion oil-equivalent barrels. At US$50 a barrel, that equates to well over US$200 billion. In addition, an independent assessment, or competent persons report, had found that 2.9 billion barrels of oil existed in the Orinduik block.
Exxon is expected to use revenue from its production in order to recoup its capital investment. Whatever remains of this is the “profit oil” Guyana will have to split with the oil company and its associates.
According to Annex C of the Production Sharing Agreement (PSA) Guyana signed with Exxon, pre-contract cost “shall include four hundred and sixty million, two hundred and thirty-seven hundred thousand and nine hundred and eighteen United States Dollars (US$460,237,918) in respect of all such costs incurred under the 1999 Petroleum Agreement prior to the year ended 2015.”