FORMER Commonwealth Secretary-General, Sir Shridath Ramphal feels it is imperative that Guyana secures its oil rights now before the decades-old standoff with neighbouring Venezuela enters a new phase.
Sir Shridath’s warning comes in the wake of recent announcements of substantial oil finds here; the ongoing border controversy between Guyana and its western neighbour, Venezuela; and the coming of age of the UN-brokered Good Offices Process, which was agreed between the two countries more than 25 years ago to find a peaceful solution to their centuries-old squabble.
In this regard, newly-appointed United Nations (UN) Personal Representative on the border controversy, Mr. Dag Halvor Nylander, a Norwegian diplomat, is expected to arrive in Guyana next week to meet with officials here, Sir Shridath and Guyana’s Permanent Representative to the United Nations, Ambassador Michael Ten-Pow confirmed to the Guyana Chronicle.
Reminding the Guyana Chronicle that the recently extended Good Offices Process only holds good up to the end of 2017, Sir Shridath said:
“By the end of the year, if it doesn’t yield satisfactory progress of a solution, then we go to the ICJ [International Court of Justice]. So we can look ahead to 2018 seeing us in the court, which we hope will put an end to this evil.”
US oil giant, ExxonMobil recently made another significant oil discovery on the Snoek Well offshore Guyana, in the Stabroek Block. ExxonMobil affiliate, Esso Exploration and Production Guyana Ltd. commenced drilling of the Snoek Well on February 22, 2017 and encountered 82 feet (25 meters) of high-quality, oil-bearing sandstone reservoirs.
In an exclusive interview with this newspaper on the sidelines of the 2017 Heads of Missions conference on Monday at the Pegasus Hotel, Sir Shridath stressed that while the Good Offices Process would not have an immediate impact on oil explorations here, it is important to have the border controversy between Guyana and Venezuela resolved as soon as possible.
“Well, it wouldn’t have an impact now… The oil is not now; production is years away.
“But what we should do now is prepare for it; and because it is not a good time economically, people are impatient, inevitably,” Sir Shridath said, adding:
“But we have to prepare properly; we have to secure that oil. We have to get rid of the Venezuela issue, and we have to do all that, as the lawyers say, seriatim; one after the other.”
ON THE RIGHT TRACK
That aside, Sir Shridath, who is also an advisor to the Foreign Affairs Ministry on the Guyana-Venezuela border controversy, said the government is “on the right track” where preparatory works for the up-and-coming petroleum industry are concerned.
This foundational process, he posited, includes the initiation of legislative and regulatory frameworks that would pave the way for a safe, productive and transparent petroleum sector.
“I am satisfied that the government is pursuing the course that it should be,” Sir Shridath said.
“It will take time, but preparing for an oil discovery of the magnitude that is involved in Guyana inevitably requires worldwide skills,” he posited, noting that the government of the day should capitalise on the experiences of other oil-producing countries.
He noted, too, that the establishment of a Sovereign Wealth Fund, as shown by Canada and Norway, is also critical to Guyana’s future development. “It is not just to the advantage of this generation. We have to secure benefits for the next generation, the generation beyond me and the generation beyond you, and into the far future,” the veteran career diplomat and lawyer said.
Already, the government is consulting on the Petroleum Commission Bill. Similar consultations will commence soon on the Guyana Sovereign Wealth Fund Bill. A Sovereign Wealth Fund (SWF) is a state-owned investment fund that is made up of surpluses from official foreign currency operations, the proceeds of privatisations, governmental transfer payments, fiscal surpluses and/or receipts resulting from resource exports.
These monies can be used for investment purposes to benefit the country’s economy and citizens. Guyana’s Sovereign Wealth Fund Bill was drafted by the Commonwealth Secretariat, with input from the government. The Bill is fashioned after international model, particularly Norway, with emphasis on the Santiago Principles, which promote transparency, good governance, accountability and prudent investment practices.
Additionally, Guyana is putting the necessary systems in place to become a member of the Extractive Industries Transparency Initiative (EITI). The 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. The MSG consists of a tripartite of government, civil society and industries stakeholders. Establishing a MSG is an important requirement of EITI.