The controversial US$460M pre-contract costs that ExxonMobil has charged Guyana is yet to be audited. And while Finance Minister, Winston Jordan is aware of the concerns that the sum is inflated, he recently noted that there is nothing much that could be done at this time.
Speaking to reporters at Parliament on Thursday, Jordan said that Guyana is facing several capacity issues.
The economist said, “It is really a tough issue for us because we are still putting systems in place to do all the monitoring of expenses by ExxonMobil. I must admit that we hardly have any skills at the moment but it is not as if we don’t audit this thing in 2015 then we lost all chances…”
The Finance Minister continued, “We have to find people, set up systems and units for monitoring cost recovery and this pre-contract cost issue. Amazingly, I have heard in certain circles that if we lack skills then we should dedicate moneys from the budget towards that. But we just don’t have it! I wish the people pointing out these things could tell us where we can find the money. Let them offer solutions along with their criticisms.”
Jordan added, “We have to find the money first. Yes, the World Bank gave us US$35M recently but that could be swallowed up by the new Department of Energy.”
The Finance Minister said that the moneys needed to contract people to audit the pre-contract costs would have to be advanced to the government or when the oil comes on stream, some of the revenue could be used to hire the required people.
Chartered Accountant, Christopher Ram was one of the concerned citizens who called for the US$460M pre-contract costs to be audited. Based on his examination, he said that the numbers were not adding up.
Ram, in his writings, noted that ExxonMobil is represented by three companies as the contractor for the Stabroek Block: Esso, CNOOC, and Hess. Using the financial statements of Esso and CNOOC, the only ones which were publicly available, he pointed out a few important things.
Ram highlighted for example, that the combined expenditure of Esso and CNOOC at December 31, 2015, was $26B with reported losses of $21B, giving a total of $47B. In United States Dollars, using a $200 rate, Ram said that this gives a total US$245 million, well short of the $460 million that the Government accepted in the Agreement with ExxonMobil.
To make up the total of US$460 million, Ram said that Hess alone would have had to spend, in contract costs, some US$215 million or approximately $46B, which he opined would defy logic.
Ram stressed that the only satisfactory and acceptable resolution of this matter is a special audit independently undertaken
