As per the will of the government, three local companies will join forces with two experienced overseas partners to audit over US$9B in exploration and development expenses incurred by ExxonMobil and partners in the Stabroek Block
The US$751,000 (GY$157,165,299) contract was awarded to Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc. The local consortium will be supported by international firms- SGS and Martindale Consultants. The original asking price of the local firms was $340,776,668.
Minister of Natural Resources, Vickram Bharrat, witnessed the signing between Permanent Secretary of the Ministry, Joslyn McKenzie and representatives of the auditing agencies. This took place at a sensitization workshop on Tuesday targeting contractors and sub-contractors on licencing requirements under the Local Content Act, at Duke Lodge, Kingston.
The cost recovery audit is expected to be completed by September and will examine expenses from 2018 to 2020. Minister Bharrat explained that as part of the contract, the local companies will benefit from capacity building which could see them conducting such audits independently.
Minister Bharrat said once the audit is completed, it will be made public and submitted to the Auditor General’s Office.
“We will look at the findings and recommendations from it (the audits), and I’m sure government will take the appropriate steps to address those recommendations.”
Minister Bharrat was keen to note that contrary to certain perspectives being peddled by some media houses, Guyana will be in a position to address any claims of discrepancies discovered. He said, “…We have been in constant engagement with the operator and they are willing to support and be part of the audit.”
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.
As regards the audit and inspection rights of the government, the Stabroek Block Production Sharing Agreement (PSA) states on page two of Annex C that the subject minister shall have two years to conduct an audit for each calendar year. The oil companies are able to recover the money until all claims are settled by both parties.
Guyana’s Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator and holds a 45% interest in the Block. Hess Guyana Exploration Ltd. holds 30% interest, and CNOOC Petroleum Guyana Limited holds 25% interest. (Modified from DPI)