Govt intervened to ensure US$214M didn’t slip through the cracks – Bharrat

– responds to criticisms over 3-year tenure

On Tuesday, the Natural Resources Ministry was the first Ministry to hold its end-of-year press conference for 2023. During the press conference, one of the first questions subject Minister Vickram Bharrat faced concerned the US$214.4 million cost oil claim that was flagged by auditors and was subject to controversy, as well as his handling of the sector.
The Minister explained that when he was first appointed in 2020, he was the subject of criticism – criticism which he noted he has since taken in stride. According to the Minister, despite the criticism, the Ministry and the sectors it oversees have improved by leaps and bounds over the past few years.
“Everybody is being criticised every day. When I was appointed and we all know. This was no secret. There was criticism that I had no experience in the sector. I’m relatively new. There was a lot of criticism, which I never responded to. But I’m a big fan of cricket… when you’re criticised as a batsman, the best way to respond to the criticism is to go out, bat and bat and keep batting.”
“And make sure you make runs, so you actually answer the question without saying a word. And that is what I started to do when I took up my appointment. I went through a number of areas of improvement and what is happening in the natural resources sector under the very Minister. It’s the same individual,” the Minister said.
Zeroing in on the specific case of the US$214.4 million cost oil claim that was flagged by auditors as questionable expenses incurred during the period 1999 to 2017 by United States oil giant, ExxonMobil, Bharrat admitted that mistakes occurred on the Government’s end. However, he pointed out that it was the Government that intervened at a policy level to ensure those mistakes were corrected.
“Whether mistakes are made or not, or whether there was a mistake based on inexperience or exuberance, I would not deny. Everyone makes mistakes. Whether the mistakes were fatal or not, is the big question. And luckily, you said there was an intervention. But you didn’t say an intervention by whom. It was an intervention by the very people. Myself, President, Vice President.”
According to the Minister, had it been a case where the Government was not looking out for Guyana’s best interests then there would have been no intervention from the Government, seeking to ensure no slippage occurred with the disputed sums.
“I want to assure you, we made that intervention to say, we’re not going to accept this reduction, because the consultant said something else. The other discussion went on without our knowledge. We don’t have a report to say, yes this is the amount you reduced it to.”
“Because obviously, you need a report to substantiate what they were saying. And there was no report to say if it was reduced to US$3 million. The only report was the US$214 million. And that’s why we made that intervention and said that no, it can’t happen,” Bharrat said.
The Minister noted that the Government intervened and ensured that the rightful and accredited agency, the Guyana Revenue Authority (GRA), maintained full authority to deal with the flagged US$214.4 million in expenses from the audit.
In 2019, British firm IHS Markit had conducted an audit of ExxonMobil’s cost oil expenses racked up between 1999 and 2017 from its operations in Guyana and had flagged US$214.4 million as questionable costs.
Following months of its own review, the GRA – the technical body tasked with advising the Government on the audited oil expenses – had supported the US$214.4 million disputed sum. However, this sum became embroiled in controversy after it was reported that Senior Petroleum Coordinator at the Natural Resources Ministry, Gopnauth “Bobby” Gossai, had reportedly engaged Exxon, which resulted in the flagged figure being reduced to US$11 million and then subsequently to US$3 million.
The Guyana Government subsequently made clear that it will use the GRA-supported figure and declared that the tax body is the only technical agency in charge of the State’s auditing of the cost of oil expenses. When it comes to Gossai’s unauthorised negotiations, the Government had also announced that Gossai was disciplined in accordance with public service rules. (G-3)