The Opposition, A Partnership for National Unity and Alliance For Change (APNU+AFC) wants an audit of ExxonMobil’s oil receipts to include an assessment of reasonable and competitive prices.
According to the Opposition, if society needs any evidence the People’s Progressive Party (PPP) is totally unfit to manage Guyana’s oil industry, they need look no further than the audit of ExxonMobil’s costs in developing our nation’s oil fields. According to the coalition, Guyana is billed over US$7 Billion for the audit.
“First, the PPP allowed the deadline for the audit to expire, and therefore had to ask the company for an extension to the deadline, which was a national embarrassment.
“Second, they only agreed to actually conduct that audit after overwhelming public pressure, which signaled to the world their corrupt intentions.
“Third, the calamity that appears to be about to befall our embattled country is that the audit itself is unlikely to meet even the most basic expectations, potentially leading the nation to lose hundreds of millions of USD. This folly cannot be allowed to continue.”
According to the APNU+AFC the nation was recently alerted that the long-awaited audit of ExxonMobil’s $7 billion dollar 2018-2020 cost recovery bill will only be an audit of its “legitimacy or validity.” This raises a question, said the coalition, as to whether the costs themselves are being interrogated.
One of the major concerns that have been raised as Exxon looks to recover its expenses is whether these costs have been inflated and the Opposition wants the PPP to come clean to the nation as to the exact nature of this audit.
Demanding the Terms of Reference for this audit be released so Guyanese could know what specifically the auditors have been contracted to do.
Warning that failure to properly audit Exxon is a dereliction of duty of the most heinous form, the coalition stated that hundreds of millions of USD are at stake.
“Even further, this nation cannot afford to let any company, let alone the one operating the nation’s largest resource reserves, believe that we Guyanese, out of ignorance, or foolhardiness or corrupt intent, will not closely monitor what we are being charged. That is a recipe for disaster, and no serious government would receive a bill for over $7 billion USD and not check to see whether the prices it is being charged are reasonable and competitive.”
“Further, it is clear that not only does Guyana have the right to verify whether Exxon’s expenses are inflated, this is expected under the PSA. Annex C of the PSA, Accounting Procedure, in Section 1.5, states: “the minister shall have the right to audit… accounts and records of the Contractor.” Additionally, Annex C, section 3.1, b, subsection 1 and 2, indicate that some costs can only be recovered once they have been verified as reasonable and competitive.
“Subsection 1 states: ‘The actual costs of contracts for technical and other services entered into by the Contractor for the Petroleum Operations, made with third parties other than Affiliated Companies of the Contractor are recoverable; provided that the prices paid by the Contractor are competitive with those generally charged by other international or domestic suppliers for comparable work and services.’
“Subsection 2 continues: ‘Without prejudice to the charges to be made in accordance with subsection 2.5, in the case of services rendered to the Petroleum Operations by an Affiliated Company, the charges will be based on actual costs without profits. The charges will be no higher than the usual prices charged by the Affiliated Company to third parties for comparable services under similar terms and conditions elsewhere and will be fair and reasonable in the light of prevailing international oil industry practice and conditions.’”
The PPP, the opposition said, is so deep in Exxon’s pockets that they are choking on the lint. Even where the country has legitimate rights that it can exercise to safeguard Guyanese, as demonstrated in the quotes above, the PPP refuses to do so.
We recently heard, finally, said the Opposition, the new Model Production Sharing Agreement (PSA) will be subject to public consultations, pointing out they have demanded its release and such consultations for months.
“Together with civil society, we have forced the PPP to yield, to provide Guyanese what they are entitled to, which is some measure of transparency and accountability. We look forward to seeing this PSA and similarly look forward to the release of the audit of Exxon’s expenses. The PPP cannot be allowed to treat this country’s patrimony with an equal measure of carelessness, malice and contempt. Guyanese must oppose them on every front.”
