In November 2017, the International Monetary Fund (IMF) made several recommendations to the government, one of which includes boosting administrative systems and training personnel for the effective monitoring of cost recovery by ExxonMobil.
But after a review was done this year by the Fund, it was noted that only one of Guyana’s agencies seems to be proactive in this regard. Specifically, the Fund in a review statement seen by this news entity noted that the Guyana Revenue Authority (GRA) has been aggressive in the establishment of its Oil and Gas Unit as well as the training of the relevant personnel.
It is for this and other reasons that the IMF “strongly” urged the Government of Guyana to assign the revenue authority to overlook all cost recovery matters for the oil and gas sector. The IMF said, “An entity is yet to be officially assigned to carry out this very important task.”
Further to this, the Fund said that the Finance Ministry and the Guyana Geology and Mines Commission (GGMC) remain without the relevant technical capacity to deal with cost recovery. Its deadline to get this done was 2017.
The Fund said that until a stronger fiscal regime is in place, it would be prudent for the Government to continue with a moratorium on new petroleum contracts.
It also sought to remind that Guyana’s “weak” Production Sharing Model restricts the government to a two-year limit for auditing cost-recovery bills by ExxonMobil.
It noted, “Compared to international norms, this is a very short time period and requires local authorities revise its model PSA and make legislative changes to support same.”