…UK urges clear plan to spend oil money

EVEN though Guyana is making steady progress in laying the foundation for the Oil and Gas Industry, British High Commissioner Greg Quinn said there needs to be a clear strategic plan in place detailing how the country intends to spend the billions of dollars that will be garnered from the industry.

He said based on consultation, there should be a roadmap pinpointing the areas to be developed from the stream of revenues whether in the field of Education, Infrastructure or Health. But all the revenues must not and should not be exhausted, the British High Commissioner warned, as he alluded to the setting up of a Sovereign Wealth Fund for tough times or ‘rainy days.’
“The sort of conversation, which I know is happening, is already happening around those two areas, but what I would like to see a bit more detail about is exactly what the strategy is for spending the money,” Commissioner Quinn told reporters at his Bel Air Gardens residence on Tuesday.

However, he said there is sufficient time to get the requisite systems and plans in place ahead of the 2020 when the country is expected to start producing approximately 100, 000 barrels of oil per day. Zooming in on the Sovereign Wealth Fund, the British High Commissioner noted that an earlier determination should also be made on the percentage of revenues to be stored in the fund. Besides those recommendations, Commissioner Quinn said while there is a lot more work to be done, the Government is making steady progress as it heads in the right direction. “Things are moving fairly well,” he posited while alluding to preparatory works being done such as moves by Guyana to be a part of the Extractive Industries Initiative (EITI).

EITI is a global organisation of 51 member countries, which have subscribed to establishing, upholding and promoting the standards and tenets of good governance, transparency and accountability in the management of extractive industries. At its core the EITI promotes the belief that natural resources belong to the people and are to be extracted and managed on behalf of the people; both for current and future generations.

Just last week, a Multi-Stakeholder Group (MSG) was launched with the primary function to effectively oversee the implementation of the Guyana-EITI. During the launch of the tripartite group, involving government, private sector (industry) and civil society, Natural Resources Minister Raphael Trotman explained that EITI has the potential to deliver significant benefits to Guyana’s economy through increase accountability and transparency while simultaneously enhancing the country’s reputation as a sound investment destination.

Additionally, government is expected to lay before the National Assembly Sovereign Fund Legislation–a move which will guarantee citizens the right to enjoy equitable shares in the national patrimony. Legislation for the establishment of a Petroleum Commission, regulations for local content and for health and safety for the environment are also expected to be presented this year. As preparations move a pace, Cabinet also granted approval to the Natural Resources Ministry to retain a consultant – Pedro Haas, Director of Advisory Services at Hartree Partners – to provide a high-level feasibility assessment to the Government of Guyana on whether investing in an oil refinery is a viable economic option. Haas is examining the demand, availability, the economic landscape and forecast. His findings will influence Government’s decision.

In January, ExxonMobil discovered more than 95 feet of high-quality, oil-bearing sandstone reservoirs in its Payara-1 well offshore Guyana. Payara is ExxonMobil’s second oil discovery on the Stabroek Block, and is located approximately 10 miles (16 km) northwest of the 2015 Liza discovery.