AS the country’s petroleum sector evolves, the authorities will consider whether the citizenry will receive benefits directly such as year-end cheques,or via social services within the regions.
This was noted on Wednesday by Minister of Natural Resources, Raphael Trotman when he appeared before the Economic Services Committee of the National Assembly to provide an update on the work of the Natural Resources Ministry. Junior Minister, Simona Broomes and staff of several agencies which fall under the umbrella of the ministry,including the Guyana Geology and Mines Commission (GGMC) and the Guyana Forestry Commission (GFC),accompanied the ministerial team.
The ministers and support staff were asked by the committee for updates on the oil and gas sector, the aftermath of Chinese logging company Bai Shan Lin’s closure of operations in Guyana as well as information on the mining syndicates.
Trotman during his presentation, told the committee which is chaired by Minister of Communities, Ronald Balkan, that the population will benefit from the petroleum sector after American oil giant ExxonMobil starts pumping gas in commercial quantities mid-2020. In his update, Trotman told the committee that the government has completed the structure for the Sovereign Wealth Fund Bill, an aspect of the regulatory framework for the oversight of the country’s newest economic sector. He said that the bill will have budget support or what he termed “budget stabilization” which he noted is to ensure that the ministry of Finance is capable of carrying out programmes relative to the petroleum sector.
He said that government will ensure that the nation’s children and adults can benefit from the “finite” resource, noting oil will not be around forever. To this end he mentioned that social programmes will be undertaken from the funds of the sector to ensure everyone has the best education and health care. He elaborated that the authorities will ensure both citizens and regions benefit from the oil revenues.
“The idea is that regions would receive a percentage perhaps following the fiscal transfer system as is use currently,” Trotman said noting that the decision will rest with the Minister of Finance and ultimately the National Assembly. He further explained that the population can receive benefits in a variance, in which each citizen would receive a cheque at year end such as what occurs in Alaska. On the other hand he noted the funds can be provided to each region of the country for the development of various sectors. This occurs in Peu and Colombia, he noted.
He added that Regions Five, Six and Ten will benefit from the establishment of a petroleum facility which is carded for Crab Island in Berbice. Meanwhile, as the ministry works along with ExxonMobil to determine the volume of the natural gas in the Stabroek Block, Trotman assured the committee that the ministry will pay keen attention to the usage of the gas. “What is for certain is that we would not be squandering the gas or flaring the gas,” he said.
He noted that the idea of the resuscitation of an alumina plant can become a reality since a plant of such nature requires high energy and the natural gas plant can produce that energy required to power the plant. Trotman posited that Guyana may be able to access 50 million cubic feet per day of natural gas which by calculation can provide the country with 200 megawatts of power. He said the move can become the answer to some of the country’s electricity woes.
As it relates to Chinese logging company, Bai Shan Lin, Trotman informed the committee that the government was left with “little choice” following a national outcry regarding the company’s forest practises as well as the entity’s heavy financial indebtedness. He said the GFC made futile efforts to recoup monies owed by the company and as such, the logging company could not be allowed to operate without honouring its financial obligations to the state.
Trotman said government is concerned about the logs which were left lying behind,and he noted that the situation would be assessed to determine whether the logs will be auctioned or sold to individual companies.