The Minister of Natural Resources, Vickram Bharrat has announced that the new Petroleum Production Licenses for the oil and gas sector will include an auditing fee, which will be paid to a Petroleum Account currently being managed by the Guyana Geology and Mines Commission (GGMC)
The Minister was at the time responding to questions from Opposition Member of Parliament, David Patterson during the consideration of the budget estimates on Tuesday.
“In the new production license that we are issuing now, we have actually included an audit fee, so the operators is paying an auditing fee to Guyana,” the Minister told the Committee, as he said, in the interest of transparency and accountability.
However, the cost recovery audit of ExxonMobil Guyana’s expenses for the period 2018 to 2020 by the consortium of local firms is still to be completed. The local consortium is collaborating with Oklahoma-based Martindale Consultants and the Swiss Technical Company – SGS.
“…An initial report was submitted by the consortium, and we are awaiting, the second report which should be submitted in another two months from today,” the Natural Resources Minister said.
According to the Minister, the second cost recovery audit will be completed and ready for submission to the National Assembly by March 2023.
He admitted, however, that the audit report has been delayed but indicated that the local consortium was building its capacity to effectively conduct the audit.
“We do have good auditors and accountants in Guyana but can they actually audit oil and gas expenses? The answer to that is no. They need to familiarize themselves with the expenses associated to the Oil and Gas Sector,” he reasoned.
In search of more answers, the Opposition enquired about the first cost recovery audit for the period March 2017 to July 2019, which was expected to be reviewed by the Guyana Revenue Authority (GRA) since November 2020.
In response, the Minister told the Committee that while the audit was done by the GRA in 2020, there was need for additional work to be done with the petroleum operators.
“They would have found that there was need to go back and to do some further work with the operator, which was done and a final report has now been submitted and is being reviewed by all the relevant agencies, stakeholders including the Petroleum Unit at GRA. So, once that is over, we will conclude the first audit,” Minister Bharrat said.
With more training, the Natural Resources Minister is of the opinion that in the future, the local consortium will be able to conduct audits within the Oil and Gas Regular at a faster rate.
Meanwhile, $100.7M has been allocated for the review of the Whiptail Development Project – the sixth development project in the Stabroek Block.
According to the Natural Resources Minister, the plan for the Whiptail Development Project is expected to be submitted later this year.
Whiptail is expected to development of approximately 40-65 well with the capacity too produce between 220,000 and 275,000 barrels of oil per date. The multibillion-dollar project is expected to come on stream by 2027.
Additionally, $98.5M has been budgeted to offset demurrage expenses in the Oil and Gas Sector while the Guyana National Bureau of Standards (GNBS) has been allocated $50M to facilitate the monitoring of the Petroleum Industry.
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