I would like to follow-up on SN November 18, 2021. Mere stating that an audit will be done does not mention if the 2016 Contract terms, Article 23 and Annex C will be renegotiated. There are also a number of unanswered questions that could secure Guyana’s interests. Will Guyana’s property and tax laws related to the above 60 oil-blocks that the contractors could sell, be renegotiated? Will the gains on the sale of these Guyanese properties or the oil produced and sold be taxable? The authorities need to go beyond regular audits, establishing that contractors have receipts for expenses claimed.
There are transfers from Guyana’s Production and Sales Share to the Multi-national Contractors disguised as the taxes that the minister must pay under Article 15.4. Are such transfers authorized under Guyana’s Tax Laws? And does Guyana’s laws allow the minister to obtain Tax Receipts from the Guyana Revenue Authority as a qualified taxpayer? Under the Profit Tax Assessment, Article 15.4, what realistic cost per barrel measurement is used to determine profitability? All stakeholders should be interested in audited and verified cost per barrel. Other unanswered questions without an audit and verification are:
– What are the categories of costs included in the 75 percent maximum Contractor Capital Recovery?
– Are royalties paid from Guyana’s Production Share and also included in the 75% Capitalized Costs?
– Or, are the royalties taken from Gross Revenues before the 75 percent? Answers to these questions would determine what Guyana finally ends up with in its Sovereign Wealth Fund over each calendar year.
In an Oxfam report, reference was made to the difficulty of obtaining benchmark cost data. It would compromise the entire audit if such information has to come from the contractor being audited. The government’s own website does not deal with costs or downloadable data related to the Contractor’s Quarterly Production and Expenditures. On the revenue side, prices are determined by international markets. This does not leave much responsibility for the local offices. Would the public know how much is claimed for one of those floating storage ships? These are some of the unanswered questions that would determine how wealthy or poor Guyanese become.
Sincerely,
Ganga Persad Ramdas
