Gov’t implements new protocols after unauthorised audit engagement

SENIOR Petroleum Coordinator at the Ministry of Natural Resources Bobby Gossai Jr., will face “disciplinary measures” over the unauthorised engagement with ExxonMobil on the cost-recovery audit.

Minister of Natural Resources Vickram Bharrat on Thursday conveyed this decision in a statement, stating, “I have asked the Permanent Secretary to take the necessary disciplinary measures.”

This action comes in light of Gossai’s involvement in dealings related to the oil giant’s local subsidiary’s spending between 1999 and 2017, following an investigation into the US$214 million audit.

The minister said that since the inception of this audit, the government’s position has been to consistently emphasise that it is the Guyana Revenue Authority (GRA) which plays the pivotal role in determining the final outcome of the audit in question in line with the Production Sharing Agreement (PSA).
He underscored that the Ministry of Natural Resources’ role in this process was to oversee the audit, as stipulated in the PSA, and facilitate information exchange among all relevant parties, including the GRA.

However, based on advice from Gossai, that initial claim of US$214,911,994 was reduced to US$3,414,853.68.
In response to this dramatic shift, Minister Bharrat formally sought clarification from the GRA, in a letter dated November 28, 2022, seeking a “No Objection” to confirm this revised figure.

Fast forward to July 2023, Minister Bharrat said that Gossai, while in a meeting with himself and Vice-President Bharrat Jagdeo, reported that the initial sum was further adjusted, first to US$11,497,140 and eventually down to US$3,414,853.68.
Minister Bharrat, considering his previous correspondence with the GRA and the agency’s critical role in the audit process, said that he assumed that this reduction had been achieved in consultation and collaboration with the GRA.

“I subsequently learnt that the GRA did not agree with the position, and the initial claim of US$214,911,994 remains the same,” he said.
In light of the foregoing developments, Minister Bharrat reiterated that the government’s stance remains unwavering, affirming that the GRA is the sole entity authorised to make the final determination on the matter.

“After examining all the facts, it is clear Gossai acted without the requisite authorisation to engage EEPGL [Esso Exploration and Production Guyana Limited] and provided inadequate advice, and as such, I have asked the Permanent Secretary to take the necessary disciplinary measures,” the Minster said in his letter.
Additionally, he said that the government will establish new protocols and systems to prevent similar lapses in the future, emphasising full disclosure and transparency in dealings with stakeholders in the sector.

Two weeks ago, General Secretary (GS) of the People’s Progressive Party (PPP), Dr. Bharrat Jagdeo, following consultations with President Dr. Mohamed Irfaan Ali, called for a probe to ascertain the persons responsible for engaging ‘Exxon’ on the cost-recovery audit.

In auditing Exxon’s expenses from 1999 to 2017, the British Consultancy Group hired to perform the audit, IHS Markit, flagged a US$214M sum of questionable spending. This figure received a no-objection from GRA, and an indication to close the US$1.6B audit of Exxon’s expenses.
However, following this no-objection, it was revealed that a staff member of the Ministry of Natural Resource’s Petroleum Unit engaged ExxonMobil’s local subsidiary, formerly known as EEPGL, in reducing the US$214 million to US$3 million.

At a previous press conference, Dr. Jagdeo had stated that the government was in support of the GRA’s decision, and that the ministry’s engagements with the subsidiary should not have happened.

“Somebody has to give an explanation of how they engaged with ‘Exxon’, and we have to have a policy with people who are at the technical level, and who engage with executives, that they must seek explicit clearance from the ministry, and report back on the nature of the engagement,” Dr. Jagdeo had said.