Private Sector lauds Govt efforts to ensure local content participation

— in audit of ExxonMobil cost oil expenses

Opinions have varied on the Government’s efforts to prioritise local content participation and partnership for the audit of ExxonMobil’s cost oil claims, but the Private Sector Commission (PSC) has thrown its support behind the Government’s approach.

In a statement on the issue, the PSC welcomed assurances from President Dr Irfaan Ali and Vice President Bharrat Jagdeo, that the Government will audit the cost oil expenses claimed by ExxonMobil and its partners and that efforts will be made to ensure maximum local participation.
“We remain resolute in our support for all activities that will enhance our Private Sector businesses, national development and the wellbeing of the Guyanese nation as a whole,” the PSC said in its statement, urging its members to collaborate where necessary in order to have the capacity to help carry out the audits.
According to the PSC, it looks forward to Exxon’s cooperation during this process and for a prompt and transparent audit of their expenses. They made it clear, the importance of the oil industry to the nation.
“The PSC wishes to emphasise the fact that the oil and gas sector is critical to Guyana’s national development and that every effort should be made by the Government to ensure its full accountability, including comprehensive and timely audits.”
“The PSC, therefore, looks forward to a prompt and transparent audit process of the Exxon expense claims and the PSC expects the full and unqualified cooperation of ExxonMobil in the conduct of this audit,” the PSC further said.
When the Government had put out the tender, international firms had dominated bids to audit oil giant Exxon Mobil’s cost oil claims for oil production in Guyana. Based on the bids that were opened, four international audit firms submitted bids for the project – Bayphase Limited of the United Kingdom (UK), Rosa Correia and Associates of Portugal in partnership with Swale House Partners of the United States and Squire Pat, Gaffney Cline and Associates Incorporated of the UK and Calendar Law Firm.
Eclisar Financial and Professional Services, the fifth firm that submitted a bid, is a local company that was established in 2012 and was founded by Managing Director Azzar Haniff. All companies vying for the contract submitted financial proposals.
In the case of Bayphase, the British company has experience working in Guyana. Under the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government, the Energy Department contracted Bayphase to conduct a review of Exxon’s Field Development Plan (FDP) for the Payara oil development in December of 2019.
The review was completed but approval of the FDP was delayed in the wake of the controversies that followed the March 2, 2020 elections. It wasn’t until after the People’s Progressive Party (PPP) entered office last year that action could be taken.
Recently, Vice President Jagdeo had said at a press conference that the audits were unable to be completed on Exxon’s post-2017 expenses, due to the lack of local capacity or participation in the audit. However, he had subsequently assured that the audits would be done.
When the People’s Progressive Party/Civic (PPP/C) Government assumed office in 2020, it took over the shepherding of an audit of ExxonMobil’s pre-contract and other pre-2017 costs. The audit was being conducted by the UK firm, IHS Markit, which was hired by the previous Administration four years after oil was first discovered offshore.
The Vice President reminded that cost recovery audits were left outstanding for years. He expressed disappointment that Guyana, under the previous Administration, did not develop its capacity to conduct cost recovery audits, nor did it make haste to contract a firm to conduct those audits.
In addition to setting the stage for local audit firms to benefit from involvement in cost recovery audits, the Government will also build the capacity of the Guyana Revenue Authority (GRA) to conduct its own cost audits for the oil sector. Jagdeo said he intends to address the issue more comprehensively in a future engagement.