Gov’t working to build local capacity for oil audits -VP Jagdeo

The Government of Guyana is working on building capability to conduct audits within the specified periods of the oil contract for exploration works offshore.

Vice President, Hon. Dr Bharrat Jagdeo said while it is unfortunate that Guyana does not have such a system in place, the Government is working to ensure that it is set up soon.

The VP made these statements during his interview on Wednesday evening on Kaieteur Radio’s “Guyana’s Oil & You.”

“Time has expired basically for quite a bit of the expense, but we’re building the capability to do audits not in real time, but with the shortest possible lag after the expenditure,” he said.

The Vice President said the groundwork is being laid to avoid a similar situation when the Payara Development and Liza 2 are audited. He further stressed the importance of building the audit capability with persons who understand the industry practices.

“We’re going to do it with the Guyana Revenue Authority, as well as using some consultants in the short term to build that capability while we can train more and more Guyanese to be familiar with the nuances of an oil audit, which is slightly different than a financial audit,” Dr. Jagdeo said.

He noted that it was in November 2019, when the previous administration hired IHS Markit, to audit ExxonMobil’s pre-contract costs and exploration costs up to 2017. So far, the company has audited $320,000,000,000 (US$1.6 billion). Dr. Jagdeo explained that a draft report was submitted and is being examined before the audit is sent to Exxon and is finalised.

“There are some adverse findings already about what Exxon and some other companies claimed on pre-contract costs, but that would only await their finalisation of the audit before we seek or get Exxon’s comment on this so that those costs are not included in cost oil.”

The Vice President reiterated the Government is working in multiple areas to put systems in place for the proper management of the industry.