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—former EPA head says
By Svetlana Marshall
Approval for the Yellow-Tail project should be placed on hold until US oil-giant ExxonMobil agrees to facilitate the audit of its post – 2017 expenses totaling US$9.5B, the Alliance For Change (AFC) said.
AFC Executive Member, Dr. Vincent Adams made the call amid growing concerns over Government’s failure to audit ExxonMobil’s expenses linked to the development of Stabroek Block’s Liza Phase One and Two Projects due to “the lack of strong local content” as contended by the Government.
Speaking during a virtual press conference on Tuesday, Dr. Adams, who most recently served as the Head of the Environmental Protection Agency (EPA), said a similar demand of the EPA under the A Partnership for National Unity + Alliance For Change (APNU+AFC) Government proved successful in obtaining unlimited liability assurance coverage from Esso Exploration and Production Guyana Limited’s (EEPGL) parent companies as a condition for approving the Liza Two Project.
Unfortunately, he said, the People’s Progressive Party/Civic (PPP/C) Government upon taking office in August 2020 promptly reversed that decision.
It was Vice President Bharrat Jagdeo, who had indicated Government’s failure to meet the audit deadline but the AFC Executive said the excuse proffered is unacceptable.
“The Government’s pretext to cover-up this most callous act against its people, is that Guyana does not have the expertise to conduct such an audit – a highly incredulous excuse based upon the fact that the AFC is well aware of a highly qualified firm owned by a Guyanese in the Diaspora that submitted a bid to conduct the audit. Is the Government speaking with forked tongues when it extols itself as so badly wanting the help of the Guyanese Diaspora, but at the same time signaling that they are not being counted as Guyanese?” Dr. Adams said.
Both President Irfaan Ali and the Vice President have assured that though the deadline is long gone, the audit would be conducted but the AFC Executive said the Government is known for not fulfilling its promises.
“It would be ill advised to take out those champaign glasses; for firstly, we all know the trustworthiness index of the Government keeping promises, especially when it comes to Exxon which was described by the Opposition Leader as “international bullies” with the “Government being under Exxon’s hammer.”
Secondly, there are too many unanswered questions about this promise, since the fact remains that there is no provision in the Agreement for reopening the audit after its two-year expiration period,” Dr. Adams reasoned.
He pointed out that the agreement states that the “Government shall not amend, modify, rescind, terminate, declare invalid, require renegotiation, compel replacement or substitution…without the prior written consent of the Contractor.”
It is against this background that AFC is urging that the approval of the Yellow-Tail Project be placed on hold until there is a real commitment to have the audit facilitated.
Weighing in on the matter, AFC General Secretary David Patterson recalled that when the PPP/C was in opposition, it was loud in condemnation of the coalition’s efforts to audit ExxonMobil’s US$460M pre-contract costs.
He said though the audit was completed over a year ago, no details of the result have been made public. “The result of the pre-contract audits would provide the country with invaluable insight to billing practices of the operators,” Patterson explained.
He added: “The Public may be under the impression that the amount being audited are only that regarding the costs for the FPSO and oil drilling operations, however included in this US$9B are other costs, such as the cost for their new HQ being constructed in Ogle; every time Exxon charters a private plane to travel from the US to Guyana, this is cost reimbursable; every function that Exxon hosts, every bottle of wine drunk by the invitees at these functions can be listed as cost recoverable; every social media ad, claiming that the company is good corporate citizen is cost recoverable.”
He said too that the cost includes the salaries for persons in Houston and other parts of the world who the company may claim are working on Guyana projects.
Patterson said the Opposition submitted several questions to the Minister of Natural Resources Vickram Bharrat, however, based on the recent announcement that an audit will be undertaken, several more questions are required to be answered.
Patterson said Guyanese must know what mechanism will be used to appoint the new auditors, since the previous public tender process has been discontinued. Like Dr. Adams, he queried whether ExxonMobil and its partners have agreed to extend the period for the audit and if so, under what condition.
“What is the timeframe for the commencement and completion of this new audit process? If the audit determines that ExxonMobil owes the country, what would be the mechanism for the company to reimburse the country? It is reported that ExxonMobil has requested an extension to the time frame for the relinquishment of sections of their concession, has the Government entered any discussion with the company to extend their relinquishment period, in exchange for ExxonMobil agreeing to extend the audit period?” Those were among questions Patterson said ought to be answered by the Government