…President Granger says Guyana must be prepared soonest for first oil
…holds key meeting with IDB representatives
PRESIDENT David Granger, who also has oversight of the Department of Energy, on Thursday met with a team from the Inter-American Development Bank (IDB) at State House, to discuss the strengthening and capacity building of the Department of Energy as the country prepares for first oil.
The head of state was accompanied by Minister of State, Dawn Hastings-Williams; Minister of Finance, Winston Jordan and Director of the Department of Energy, Dr. Mark Bynoe.
The IDB team was led by Country Representative, Sophie Makonnen and included sector specialist, Lenin Balza; Executive Leader, Advisory Services, Cassandra Ramkerrysingh and Executive Director at Ernst and Young Services Limited, Salvador Mancilla.
The President, in his address to the team, said Guyana must be prepared in the shortest possible time, for the coming of first oil. He stressed that it is incumbent upon the government to make decisions that are best for the sector and the country.
“This meeting is an important step in our need to make decisions and build capacity. It gives us an idea of what must be done and the IDB has been most helpful in this regard. I admit that there is urgency because of what is currently happening in the sector. Much of it has to do with our capacity and capabilities. We understand the importance that must be placed in these two areas,” the head of state said.
In December 2018, Guyana signed an agreement with the IDB for an $11.64 million policy-based loan. The project is designed to support the strengthening and the sustainability of the energy sector in Guyana by contributing to the institutional development of oil and gas governance and the development of cleaner energy sources for electricity generation.
MANAGEMENT AND PLANNING FRAMEWORK
The specific objectives of the loan programme were to develop a management and planning framework for Guyana’s oil and gas sector and, in the second instance, to contribute towards the development of a policy framework so that Guyana may diversify its electricity generation matrix using cleaner or renewable sources.
The agreed-upon policy commitments of the first tranche of the programme were the creation of the Department of Energy (DE) within the Ministry of the Presidency to assume responsibilities related to the governance and development of Guyana’s oil and gas sector; the approval by the DE of a draft roadmap to develop Guyana’s oil and gas institutional framework, and the design of a model contract for future Production Sharing Agreements (PSA).
Following this, the agreed-upon policy commitments for the second tranche were the development, for the DE, of a functions’ manual, establishing its organisational structure, budget and staff allocation, a Profit Sharing Agreement (PSA) set of protocols and mechanisms for contract management; and an oil and gas depletion policy, designed by the DE and presented for approval to the Ministry of the Presidency.
In this regard, the IDB team discussed several policy options with the government, which are geared towards strengthening and building the capacity of the DE and for the regulation of the oil and gas sector.
Meanwhile, Head of the Department, Dr. Bynoe, in an invited comment, said, “The meeting basically looked at two elements that were pre-conditions for the policy-based loans. One was for the completion of an organisational structure, standard operating procedures (SOPs), indicative budget along with future directions that the department should be heading in. It also allowed us an opportunity to assess where we are and to focus on where we should be. The options that were presented were multiple and so it offers government now a basis for better decision making going forward.”
He noted that the IDB has been supportive of the government and the department through the provision of technical assistance such as the hiring of the DE’s Technical Advisor, Mr. Matthew Wilks and in the development of the Profit-Sharing Agreement (PSA) manual. (Ministry of the Presidency)