“Guyana can dictate airfare expenses of oil operators”

There has been mounting concern over the airfare bill ExxonMobil is racking up; a bill which the nation will have to pay when the oil giant claims it in cost recovery. But several oil and gas consultants are saying that Guyana’s authorities can put an end to this practice. They posit that the government can stipulate what airfare expenses the oil operator is to incur or even outright refuse to pay what is not deemed to be reasonable. Oil Consultant, Dr Jan Mangal explained during an interview with Kaieteur News that in cost recovery, the oil operator can claim for money it spent on a number of things, one of which includes airfares. He contended, however, that the country can regulate anything that has to do with cost recovery. Dr Mangal said, “Guyana can dictate anything with cost recovery because the objective is to ensure that costs being claimed are reasonable. The country can refuse to pay for costs it deems unreasonable.” The consultant then pointed to instances where countries refused to pay costs claimed by oil companies. He also stated, “We can recall some ministers saying Exxon should not be audited and Exxon would never inflate costs. Christopher Ram and I said the opposite, and called for audits. “But the issue with these airfares is the tip of the iceberg; Exxon is probably defrauding Guyana of US$100’s of millions via cost recovery, in addition to the billions being taken with the unfair contract.” Dr Mangal who worked as a Petroleum Advisor to the President also made comments on the matter via his Facebook Page. Responding to a question sent to him, he said that there is no need for Guyana to do away with Production Sharing Agreements (PSAs) to bring an end to cost recovery woes. He said, “Many countries have PSAs. The problem is the government’s refusal to manage the contract. The problem is the government’s refusal to lift a finger to protect Guyana’s interests under the contract. “We need large teams of highly qualified and ethical oil and gas professionals, but the government has ensured we have none, as this benefits Exxon. With regard to the cost recovery of flights, other countries are able to handle this. “Some countries restrict which oil company personnel can travel on which flights and in what class, etc, etc. But Guyana just wants to sit back and let Exxon take everything. And the PPP would be no better.”

(Kaieteur News)