The People’s National Congress Reform (PNCR) has called on the government to clarify whether ExxonMobil is charging interest on its investments in the Stabroek Block under the 2016 Production Sharing Agreement (PSA), and if so, to disclose the applicable interest rate. The party in a public statement today expressed concern over Vice President Bharrat Jagdeo’s reluctance to provide full transparency on this matter, suggesting a potential lack of oversight or concern on his part.
The PNCR emphasised the significant financial implications of interest payments, which could potentially amount to billions of USD in revenue leakages. Given the substantial investments required to develop Guyana’s oil fields, even a 5% interest rate would result in a substantial expense. The party argued that these funds could be better utilised to address pressing national issues such as the cost of living crisis, salary increases, and poverty eradication.
The PSA’s Annex C stipulates that interest expenses are recoverable without ministerial approval as long as they are consistent with market rates. However, the first audit of Exxon, commissioned by the Coalition Government, explicitly stated that no interest expenses were included in cost recovery during the audit period. In contrast, the second audit, covering the 2018-2020 period and commissioned by the current administration, lacks a direct statement on interest expenses, raising suspicions about their inclusion.
The PNCR criticised Jagdeo for not adequately addressing this issue, noting that the PSA allows for the recovery of interest expenses without explicit ministerial oversight. This loophole, they argue, necessitates meticulous auditing to ensure that interest charges are identified and scrutinised.
The party urged the government to monitor quarterly expense reports to detect any interest charges and to engage with Exxon if discrepancies arise. They stressed the importance of transparency and accountability in managing the nation’s oil revenues, especially given the potential for significant financial losses.
The PNCR as such concluded by calling for future auditors to thoroughly examine interest payments and for the government to proactively oversee expense reports. They warned against complacency in safeguarding the national patrimony and reiterated their commitment to addressing these issues if elected to govern.
