<\/p>\n\n\n\n
The\nTable shows that the Company has incurred expenditure over the first five years\nand a bit of over $270 million Guyana dollars of which 80% was spent on\nAdministrative Expenses with the bulk of that expenditure going on Employee\nBenefits and Consultancy Fees. A perusal of the 2018 financial statements show\nthat 90% of the $75 million in expenses reported in the Statement of Profit and\nLoss was incurred on Administrative Expenses. <\/p>\n\n\n\n
The\nBalance Sheet is not any more informative or impressive and this may be because\nthe Company, with Ministerial approval has become no more than a shell. That\nprocess, in which French oil giant Total and its American counterpart\nExxonMobil now control the lion\u2019s share of the blocks awarded to Mid-Atlantic. The\nsignificant amounts in the Balance Sheet are Cash and Bank Balances of $227\nmillion, a negative balance on Reserves representing losses incurred,\nborrowings of $216 million and nearly $300 million in amounts payable to\nRelated Parties and what is stated only as Other Payables. <\/p>\n\n\n\n
No\nexpenditure, no exploration <\/p>\n\n\n\n
Article\n10 of the Petroleum Agreement requires an Annual Rental Charge of US$90,000 but\nit is not apparent whether this payment has been made or how it is accounted\nfor. Yes, the Company has farmed out most of its blocks but the financial\nstatements ought to provide more information to readers for a better\nunderstanding of how contractual revenues to the State are accounted for. <\/p>\n\n\n\n
Clearly\nno exploration has been undertaken by this Company nor does it seem as though the\nCompany has any such intention. It is expected that Total and ExxonMobil\u2019s\nlocal company Esso Exploration and Production Guyana Limited (EEPGL) will\naccount for any prospecting expenditure in their own books. Before looking into\nwhere EEPGL and how EEGPL has accounted for its expenditure (see Column # 69),\nit is interesting to inquire where Mid-Atlantic has accounted the proceeds of\nthe two farm-outs to other oil giants. <\/p>\n\n\n\n
Esso\u2019s\naccounts <\/p>\n\n\n\n
I\nhave expressed similar concerns about Esso\u2019s sharing its gigantic blocks with\nHess and CNOOC-Nexen and its failure to account for the revenues therefrom. What\nhas compounded the situation with EEPGL is that that Company seems to be\nclaiming its gross pre-contract and pre-production costs before any operating\ncosts are deducted to arrive at profit oil. It is incredible and shameful that\nthis Company has not been called out by the Government \u201cto clear the air\u201d. <\/p>\n\n\n\n
So\nthis brings us now the EEPGL\u2019s statement for 2018. As Column #69 narrated,\nEEPGL is working part of the Canje Block originally granted to Mid-Atlantic but\nthere is no way of knowing whether any of those costs are accounted for in\nEEPGL\u2019s books to be claimed as pre-production cost once the oil starts to flow.\nExxon\u2019s man was yesterday featured in a Stabroek News exclusive interview\ntelling Guyanese how great his company is and how the absence of ring-fencing\nis good for Guyana! Please Mr. Henson, we Guyanese are not all stupid to have\nour intelligence insulted. <\/p>\n\n\n\n
Conclusion\n<\/p>\n\n\n\n
It\nseems clear that some oil companies, big and small, are making rings around\nthose who ought to protect our interest and national patrimony. The result has\nbeen that for the country, it has been one disaster after another. Raphael Trotman,\nthe first APNU+AFC oil Minister was not only knew nothing but was less than\ntruthful to the country. When the portfolio was removed from him and retained\nby David Granger, it was hoped that the impact would at least be mitigated. Those\nhopes have been dashed and Granger\u2019s assessment that Dr. Mark Bynoe did not\nknow about petroleum but would know people who know has turned out to be only\nhalf-true. <\/p>\n\n\n\n
Next week, Column # 71 will look at Esso\u2019s 2018\nfinancial statements and Exxon man\u2019s exclusive interview. <\/em><\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Introduction Following up on last week\u2019s column we have set out below a Table summarizing the Profit and Loss Statement of Mid-Atlantic for each of the years 2013 (part-year) to 2018 extracted from the company\u2019s audited financial statements lodged with the Commercial Registry, a statutory obligation under the Companies Act. The Company was incorporated since … <\/p>\n