Dear Editor,
The protection of the public from untruths, half-truths, misrepresentations and distortions dictates that I make an exception to my unwillingness to engage Joel Bhagwandin in any place or in any capacity. As shown in the examples set out in this letter, his multiple-part responses in the print and social media to my repeated assertions about Esso’s financial shenanigans are replete with those four dangers. Bhagwandin cannot even get a matter as basic as the date of the 2016 Petroleum Agreement correct – it is 27 June 2016 and not October 2016 as he asserts – but yet claims that I am “misleading” the country; that I have committed “a multiplicity of errors”; and that I have “inadvertently considered” the 2016 Agreement in respect of Pre-Contract Costs.
In an apparent attempt to rebut my assertion that the US$460.2M claimed by Esso and Co-venturers as pre-December 2015 expenditure was overstated by around US$92 million, he omits from his extract the relevant and critical words “all such costs incurred under the 1999 Petroleum Agreement prior to yearend 2015….” to identify the period for which the US$460.2M is claimed. The distortions and dishonesty do not end there. Bhagwandin claims to have obtained Esso’s financial statements for the period 1999 – 2015. That is most certainly a falsehood. Esso itself admitted to the IHS auditors that it had “purged data prior to 2004” in accordance with its document retention policy. Bhagwandin also claims receipt of audited financial statements of Shell, which had bought a 50% interest in the Stabroek Block. That too, is most likely a falsehood.
As I am pointing out in my Oil and Gas column this coming Friday, the Commercial Registry has no record of any annual return filed by Shell, let alone any financial statements. I do not care whether Bhagwandin is singing to and for Esso and Shell. I am far more concerned with the litany of falsehoods and misrepresentations being fed to a trusting and unsuspecting public.
Bhagwandin also demonstrates some mathematical limitations by claiming that “Having examined ExxonMobil’s and its Co-venturers financial statements for the period up to 2016, and 2017, total (cumulative) expenses up to 2016 amounted to US$382.3M. and in 2017, total expenses for that year amounted to US$109.3M., giving rise to a total up to 2017 of US$491.6 Mn.” If Bhagwandin’s 2016 numbers are correct – which they are not – then he is suggesting that Exxon’s overstatement is greater than my US$92M! Whether Bhagwandin has read and understands the very provision in the Petroleum Agreement which he has so infamously misquoted, speaks to his comprehension.
But there are also mathematical deficiencies on display as well. Only by the strangest maths – or inexplicable credits – can the accumulated cost at December 2016 be less than the accumulated cost at December 2015! Put another way, Bhagwandin is suggesting that the total expenditure for the two years 2016 and 2017 – immediately after the discovery of oil – was only US$31.4 million (US$491.6M – US$460.2M). Even common sense would caution against such an absurd proposition.
But nothing it seems, restrains Bhagwandin. Bhagwandin has expressed a desire to debate with me on oil and gas. He will have earned such a privilege when he can demonstrate:
● that he understands the difference between GAAP and generally accepted accounting principles (one is capitalised and specific to the USA, the other is generic across jurisdictions), each with its own nuanced meanings and applications;
● that he is capable of understanding the difference between the Minister’s audit under Article 23 of the 2016 Petroleum Agreement, and the right of the GRA to carry out a tax audit of the returns of any taxpayer under the tax laws;
● that he has read and understands the (Guyana) Revenue Authority Act and critically, the powers and functions the Act confers on the Authority and on the Commissioner General; that he understands the legal concepts of intra vires and ultra vires;
● that he has read the IHS final audit report in which Exxon admits that its claim of US$460.2M. of expenses prior to 2016 (meaning 2015 and earlier) is overstated by an unspecified sum, because of “items erroneously included in the cost bank”; and
● that he is capable of engaging honestly and quoting correctly.
Considering Bhagwandin’s demonstrated deficiencies in arithmetic, comprehension, analytical capabilities and legal and accounting questions on which he seeks to pronounce, he is unworthy of a debate with anyone, and in my case, any further exchanges.
Sincerely,
Christopher Ram
