Contrary to questions being raised, the Audit Office of Guyana (AoG) is affirming that it does have the capacity to audit the Natural Resources Fund (NRF), which will hold revenues Guyana gets from the oil and gas sector.
In an interview with this media group, Auditor General (AG) Deodat Sharma made it clear that his office had the capacity to complete such audits.
With the AG as the external auditor of the NRF, persons have theorised that hiring an international firm was the way to go.
But Sharma also noted that even now, the Audit Office is building its capacity further to audit the Fund.
“I have capacity to do the sovereign wealth fund audit, because it’s basically a financial audit. They put in money and they spend it. Spend it on infrastructure, expenses that are normally covered by the estimates,” he said. “I have two officers in British Columbia, on a nine-month programme.
“One will be looking at how prepared are we in terms of oil spill. We are continuing in terms of the active assistance. I will be going shortly to the British Columbia audit office, in order to coordinate. I also went to Norway. And I had a chat with the audit office of Norway and Sweden in terms of how they look at their Sovereign Wealth Fund.”
According to Sharma, he is still in contact with these auditors and as such, the door was open for constant skills transfer. But the AG noted that his office did not have the capacity to do cost oil audits.
“[Well] What I don’t have the capacity to do is to verify the oil and gas money. We are now looking at that. For that, you have to get technical knowledge; you have to get engineers, economists, lawyers, and different people.”
He acknowledged that the Department of Energy has tendered out in order to get the audits done into pre-contract costs. Sharma expressed his hope that this could be completed soon, so that these findings could also be audited.
The Stabroek Block is 6.6 million acres. Esso Exploration and Production Guyana Limited is the operator, and hold a 45 per cent interest. Hess Guyana Exploration Ltd holds a 30 per cent interest, and CNOOC Nexen Petroleum Guyana Limited holds the remaining 25 per cent interest.
Guyana will have to audit and verify cost oil claims Exxon will make on its revenue. Exxon is expected to use revenue from its production in order to recoup its capital investment.
Whatever remains of this is the ‘profit oil’ Guyana will have to split with the oil company and its associates.
According to Annex C of the Production Sharing Agreement (PSA) Guyana signed with Exxon, pre- contract cost “shall include four hundred and sixty million, two hundred and thirty seven hundred thousand and nine hundred and eighteen United States Dollars (USS460,237,918) in respect of all such costs incurred under the 1999 Petroleum Agreement prior to the year ended 2015.”