Norton calls on Government to build capacity to audit offshore oil activities

Leader of the People’s National Congress Reform and APNU Chairman, Aubrey Norton, believes that with the ExxonMobil Guyana-led consortium having recovered its investment of US$55 Billion, Guyana must build its capacity to audit offshore activities in the Stabroek Block.

He said the audit should include the operational expenses claimed by Exxon and its co-venturers.

The 2016 Production Sharing Agreement (PSA) provides for ExxonMobil and its partners to recover their operational expenses in the Stabroek Block based on the investment made. On Friday, Mr. Norton expressed grave concern that the country lacks the capacity to conduct audits within the Oil and Gas Industry.

“We need to improve our capacity to audit. When the auditor sends it to the government who the government has that has the capacity to say this is factual or not, virtually no one and so, as you develop oil and gas, you have to develop institutional capacity to be able to audit. Additionally, moving forward whatever new contract that you make you have to have clear rules as it relates to the company providing the data to ensure that they are properly audited,” Norton said.

Norton said before the APNU+AFC Administration left office in 2020, the Government was actively putting systems in place to increase its human resource capacity to audit offshore activities. However, most of those plans were undone as the new Government removed many of the professionals who were in place.

“You cannot deal with a multinational company that is more powerful than your state and you are not developing the capacity to audit,” Norton said.

Norton’s statement comes at a time when APNU Member of Parliament Sharma Solomon has raised concern about Government’s silence on the third audit that was done of US$19.6 billion in claims made by Exxon for the period 2021-2023.

In justifying Government’s position not to release the results of the audit more than a year after it was completed, Minister of Natural Resources, Vickram Bharrat said the Government is protecting the national interest but MP Solomon said such explanation does not stand up to scrutiny.

He said silence is not transparency, and Guyanese must be kept abreast each step of the way.

MP Solomon expressed the view that the Government may be overly reliant on information provided by ExxonMobil while failing to interrogate the numbers.

“The APNU is not anti Exxon. We are pro-investments. We recognize and respect the investments made. Our concern with reference to any audit, it is government itself. You are taking figures without properly understanding those figures. The President would have repeated numbers without establishing where those numbers arrived from. More so, where we had previous concerns three times to be exact in accepting Exxon’s number,” MP Solomon said.

He said previous audits have already demonstrated why government scrutiny matters.

The Opposition MP explained that the first audit done by ISH Markit examined approximately US$1.7 billion in expenses over the period 1999-2017. The audit identified about US$214.4 million in disputed expenses, while the second audit conducted by Guyanese Audit firm VHE Consulting examined approximately US$7.2 billion and identified another US$65.1 million that the government did not accept. The third audit was also conducted by VHE, and covered approximately US$19.6 billion.

MP Solomon said Guyanese must not be made to wait, while the government negotiates behind closed doors.

In the case of the first audit, the Government and Exxon remain in gridlock over the selection of a sole expert to resolve the dispute over the US$214 million in questionable expenses.

The sole expert is expected to determine whether the US$214 million in questionable expenses as flagged IHS Markit were legitimate.

But after more than a year of agreeing to the process as provided for in the Stabroek Block Production Sharing Agreement (PSA), the Government, at the level of the Guyana Revenue Authority (GRA), and Exxon have not reached an agreement despite nominations from both sides.

Exxon has long maintained that it intends to recover the entire US$1.678 billion in cost for exportation work done between 1999 and 2017.

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