GRA pushing to set up cost recovery unit, struggles to retain staff

…appeals for loyalty, patriotism in face of oil companies’ allure

The Guyana Revenue Authority (GRA) is building its capacity to monitor the oil and gas sector and while international help with training has been forthcoming from agencies like the International Monetary Fund (IMF), the tax agency continues to grapple with its staff being lured away by the promise of greater pay from oil companies.

GRA Commissioner General Godfrey Statia was called before the Public Accounts Committee (PAC) on Monday, where the committee is currently examining the Auditor General’s 2018 report. During the meeting, Statia was asked for an update on GRA’s efforts to get enough qualified staff to oversee Guyana’s rapidly growing oil and gas sector.
“The answer is no. We do not have the full complement of staff. We’re working assiduously to get the full complement of staff. We have even poached some staff from other Ministries. But as we know we have a paucity of skills in Guyana,” the Commissioner General said.
“We have even increased pay for persons in that capacity, for them not to leave. But what we have seen is that as we train staff, we lose staff. We have actually lost five staff we would have trained, within the past year. And they’re all accountants,” Statia further explained.
The GRA Commissioner identified oil company and Stabroek block co-venturer CNOOC as one of the companies that was able to acquire their employee. In fact, Statia said that in some instances employees are offered salaries that eclipse even his salary and the salaries of top officials in his office.
The PAC questioned whether GRA contracts employees to prevent them from leaving. According to Statia, he is reluctant to do this since it may affect workers attitude to their job. He explained that the tax body often appeals to workers’ patriotism to prevent them from leaving.
“We’re losing people at the assistant and the manager level. We nearly lost one at the Deputy Commissioner scale the other day. And what I mean, I had to call her in and talk to her about it. I’m talking about the person in charge of the cost oil. We had to appeal to her patriotism,” the Commissioner General said.
Statia, meanwhile, spoke of their efforts to attract staff for cost recovery audits, as well as the help GRA has been receiving from the IMF to train its staff. Other help, such as help from oil-producing Ghana, has not been forthcoming – though Statia did not say why.
“We were actually going to get some help from Ghana, but that has fallen through the cracks. But what has happened since we had this relationship with the IMF for a number of years since we asked them for help, they have been providing experts in the field for both customs and audits and training in these areas.”
“Most of the staff that we do not have, belong to a certain segment we are now developing. And that is the cost recovery audit section. We’re now developing that. We’ve been promised some staff for that particular area this year,” Statia explained to the committee.
The audit of cost oil claims is critical to ensuring that Guyana does not lose out on billions in oil revenue. ExxonMobil’s pre-contract costs were inherited by the current Government when it entered office in 2020. US$460 million in pre-contract costs were already written into the 2016 Production Sharing Agreement.
According to the contract, the 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 in respect of all such costs incurred under the 1999 Petroleum Agreement prior to the year ended 2015.”
There is an additional sum of approximately US$400 million from 2016 to 2017, which is believed will also come under the rubric of cost oil. The previous A Partnership for National Unity/Alliance For Change (APNU/AFC) Government had received much criticism for agreeing to these costs without an audit being done.
The pre-contract cost audit was eventually conducted by the UK firm, IHS Markit, which was hired by the previous Administration four years after oil was first discovered offshore. When the People’s Progressive Party/Civic (PPP/C) PPP/C Government assumed office in 2020, it took over the shepherding of audits for ExxonMobil’s pre-contract and pre-2017 costs. (G3)