Norwegian Energy Expert, Jan Eckhoff, is of the firm view that Guyana’s authorities must demand that ExxonMobil publishes all information on its equity holders and subsidiaries.
During an exclusive interview with the Guyana Standard yesterday afternoon, Eckhoff said that many oil and gas companies seek to protect the identities of their equity holders and subsidiaries. He stressed that this allows “corrupt leaders and other public officials to hide stolen funds unnoticed.” He warned that “vague” financial statements and the inadequate disclosure of information also make it easy to disguise corrupt deals, and impossible for any regulatory body here to monitor the oil company.
The US Country Manager at Norwegian Energy Partners said, “It is important for Guyanese to demand detailed financial reporting by oil and gas companies because a lot gets hidden in the details… Demand more disclosure so you can get to detect transfer pricing schemes even better, see where they are shifting their profits… You get to know those who have a hidden interest in these projects and where… It might not be Guyana but it can be elsewhere…”
He added, “These oil companies must also be made to say what they’re doing to prevent corruption, so citizens can see whether it’s enough or if it allows room for bribery… That is the way it is in Norway, Chile, and Canada…”
In addition to this, the Energy Consultant said that Guyana must pay keen attention to the reporting format for the financial information of oil companies. He said that there must be a demand for disaggregated information.
Eckhoff said, “We have done numerous studies at my company which shows that there are deliberate disparities in the reporting styles of some oil companies. Most companies use tabular reporting to present information. But the topics included in tables and the level of aggregation varies significantly. Some information is presented on a country-by-country basis and some are shown by geographic region. In contrast to tabular formats for reporting, other companies employ a narrative style. The latter creates a greater volume of reporting and makes it difficult to ascertain whether all the relevant information has been disclosed.”
He continued, “The differences are even more pronounced in the area of payments to host governments. Few companies use tables to present this information. Most fail to provide it in any form consistently across their operations. ExxonMobil and Shell are famous for this…they love to provide a long, vague, narrative and lumped figures. They are opposed to providing information on their revenue and production costs on a country-specific basis too.”
But many countries he stressed, have been able to demand a higher level of reporting by ExxonMobil with great success. In Brazil, New Zealand, and Norway, Eckhoff said that ExxonMobil and all other oil companies are required by law to break down production information in a greater level of detail and data on production per property.
“If Guyana wants to ensure that it gets ever cent it deserves from the contract, then it must demand more…, It is the least the government can do after giving away so much,” Eckhoff said.
