Friday, July 21, 2006

Bolivia: Evo Gets 4 Unknown Companies To Audit Oil Companies

As part of the renegotiation of the hydrocarbon contracts audits of the companies finances to determine investments and production will be done. As reported here, initially these audits were going to be done by PDVSA the Venezuelan Oil Giant. But now Evo has named four companies that will conduct this. Problem is no one knows who the hell these guys are.

Morales said Bolivian firms Consult Sistem y Asociados, Petroconsult, Baltic Control Ltd. and Delta Consult will conduct the audits.

Delta is a partner of the U.S. firm Lazard LLC.

Yuseef Akly, spokesman for Bolivia's Hydrocarbons Chamber which represents energy companies, said his organization was not familiar with any of the auditing companies.

"We have no record of any work those companies have realized in the petroleum industry,'
' Akly said.

Kind Of Weird
The foreign companies involved,Delta Consult "support, develop, implement and improve business processes and technical management processes," basically business support and consulting, and Lazard is an investment bank. They seem better positioned to assist operations or corporate reorganizations, rather than conduct an audit. The whole point of recent reorganizations to the global consultant companies, was specifically to separate auditing from business consulting.

As for the other three companies, if they do not have experience in the energy sector this should be a no-go. And the main question is whether these corporations aren't in fact shells for PDVSA or connected somehow to the government. In this post-Enron era, it is easier to get fair independent audits by large well-known companies.