Natural Resource Ministry official to be disciplined for negotiating expense reduction with ExxonMobil

Last Updated on Thursday, 5 October 2023, 22:25 by Denis Chabrol

The Ministry of Natural Resources’ Senior Petroleum Coordinator, Gopnauth “Bobby” Gossai is to be disciplined for negotiating the reduction US$214 million in expenses with ExxonMobil-controlled Esso Exploration and Production  Guyana Limited (EEPGL) down to US$3 million, Minister of Natural Resources Vickram Bharrat said late Thursday night.

“Therefore, after examining all the facts it is clear that Mr. Gossai acted without the requisite authorization to engage EEPGL and provided inadequate advice and as such, I have asked the Permanent Secretary to take the necessary disciplinary measures,” Mr Bharrat said.

An audit by IHS Market questioned the validity of US$214 million of the US$1.67 billion spent on exploration and exploitation in the Stabroek Block. Based on the 50/50 split of cost of oil between government and ExxonMobil and its co-venturers, if Guyana gets its way in arbitration it will be credited US$107 million.

The issue was discussed at Thursday’s cabinet meeting after the Minister submitted a report on an investigation whose aim was to determine why and who had negotiated the reduction.

Following is the full text of the statement by the Minister of Natural Resources.

I wish to bring full clarity on the issue surrounding EEPGL Stabroek Block Cost Recovery Audit for 1999 – 2017 period. From the inception the Government of Guyana position has always been that the Guyana Revenue Authority (GRA) is the sole and final authority to determine the final outcome in relation to the audit.

The Ministry of Natural Resources role was to oversee the process of conducting the audit as per the PSA, as well as, to facilitate the exchange of information and documentation among the relevant parties, including the GRA.

However, based on advice from Mr. Gopnauth Gossai that the initial claim of USD$214,911,994 was reduced to USD$3,414,853.68, I wrote the Guyana Revenue Authority on 28th November, 2022 to confirm this figure by seeking a “No Objection”.

As recent as July, 2023 Mr. Gossai in a meeting with the Vice President Bharrat Jagdeo and I, reported that the initial sum was reduced to USD$11,497,140 then further down to USD$3,414,853.68. Given that I had written the GRA since November, 2022 and it was established that the GRA’s involvement is necessary to finalize the audit, I was under the impression that the reduce figure was done in collaboration with the GRA.

I subsequently learnt that the GRA did not agree with the position and the initial claim of USD$214,911,994 remains the same.

I wish to restate that the position of the Government of Guyana today remains consistent with its original position that the only authority to make a final determination is the Guyana Revenue Authority.

Therefore, after examining all the facts it is clear that Mr. Gossai acted without the requisite authorization to engage EEPGL and provided inadequate advice and as such, I have asked the Permanent Secretary to take the necessary disciplinary measures.

Further, systems will be established to ensure no repetition of this lapse in the future. Also, staff members will be advise to make full disclosure with all contact and sharing of information with stakeholders in the sector.

Vickram Bharrat, MP
Minister of Natural Resources