The Guyana Revenue Authority (GRA) is preparing to audit ExxonMobil’s operations, even as it prepares to staff a special Oil and Gas Unit with as much as 100 persons by 2020 when the country is expected to earn at least US$700 million annually from oil production, GRA Commissioner General, Godfrey Statia said Tuesday.
“We have already notified Exxon of our intention to commence certain audits and that is exactly where we are,” he told a news briefing at the GRA’s Camp Street, Georgetown-based headquarters. He said the audits would focus not only revenues but also on expenses, assets and probably per-well as the need arises.
He said audits, in some instances, would produce more revenues in some instances than “if you go on the spot and do observations”. “You don’t have to be on the well measuring barrel by barrel to do a proper audit on any oil company. There is adequate software and you could trace the funds all over the world,” he said.
Asked what safeguards would be put in place to ensure oil companies do not inflate their expenses to rake in more from cost oil in recouping expenses, he said oil companies would have to provide information. “The first thing that you need is that you need to have adequate information flow from Exxon or from any other oil company. Once you have adequate information flow, you cannot wait until the end of the period within which you are going to start an audit…a review should be continuous. You should have persons on the spot specifically trained in these activities and reviewing the operations on a day by day basis,” he said.
Statia noted that the Finance Ministry’s latest estimate is that Guyana’s treasury would rake in at least US$700 million in oil earnings plus GRA is expected to earn US$1 billion in taxes from the entire country.
The GRA Commissioner General said contracted companies would also be audited to ensure they pay their rightful share of taxes.
Alluding to news reports that oil companies in Trinidad and Tobago have been allegedly evading US$200 million annually in withholding taxes through inter-company transfers across the Caricom Single Market, Statia remarked that “if that occurs here, it would not occur under my watch”. “It means that the tax officer was not doing their job properly. You ought to be able to pierce all of these veins,” with the correct staff to conduct reviews and audits, he said.
Statia said 10 GRA officers were present continually on ExxonMobil-hired drill-ships to “see the assets that are going on and moving off” to determine costs, and whether they are moving from one well to another.
Statia announced that retired officials of the United States’ Inland Revenue Service (IRS) would be in Guyana next week to train GRA staff members who would be assigned to the Oil and Gas Unit. He said other staff members would be sent to Trinidad and Tobago, and Britain to be trained in oil and gas taxation to take up positions in the new unit.The unit is expected to include geologists, lawyers, engineers, and petroleum accountants who would be employed from outside the GRA.
“What we lack is people who have the competence to go and find these additional taxes and that is what we are trying to do to equip our staff, to train them so that we will be in a position to find them,” he said.
Questions have been raised in the past about the GRA’s capacity to scrutinise the oil and gas sector effectively and efficiently to ensure that oil companies do not evade taxes or hide actual oil sales.