The Guyana Revenue Authority (GRA) has been given approval by the government to establish a special auditing unit that will focus on the oil and gas sector. This was confirmed recently by Vice President, Dr. Bharrat Jagdeo. He noted that the relevant training is already being done to ensure the agency is equipped to protect the country’s interests. He also noted that this forms part of government’s strategy to build in-country capacity.
The official also keen to note that efforts are being made to ensure the country has tighter controls over project costs. Jagdeo acknowledged that for the time being, the state does not have a say over deviations by Exxon from approved budgets. He said this is a glaring loophole that was left in the Stabroek Block Production Sharing Agreement. Recognizing that this can have grave implications for the country, Jagdeo said it was fixed in the draft PSAs that are set to govern 14 deepwater and shallow water blocks.
In a March 2021 report prepared by British auditor, IHS Markit, the team highlighted that ExxonMobil Corporation’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) does not furnish local authorities with detailed budgets for their offshore operations. As a result of this, the auditors said, “There is limited transparency and the ministry (of natural resources)’s ability to monitor and review annual budgets and variances with actual expenditure incurred is reduced.”
This news agency also understands that the annual work programme and budget submitted by EEPGL to regulators does not even conform to international best practices. Furthermore, the plans and budgets do not provide the Government of Guyana with the ability to understand the planned activities or provide any oversight.
Auditors have since insisted that the work programme and budget should provide details of the activities planned to be undertaken and the resulting cost outlay, ensuring responsible and sustainable development of resources and procurement alignment with in-country value opportunities.
