IT was reassuring to hear Dr. Mark Bynoe emphasise that there has been no corruption in relation to contractors and deals. Going forward, we of course have much work to do to ensure that it remains this way; but it is nice to know that preventing corruption is a priority. Given the interest in our vast resources, it’s understandable to suspect some mischief – so, Dr. Bynoe’s repudiation was absolutely necessary. But it will take more than just good intentions to prevent greed when oil revenues start flowing.
To reduce opportunities for corruption, the Department of Energy (DoE) is drafting a model contract for future PSAs. This could take up to a whole year to complete but is absolutely critical. Dr. Bynoe said that only AFTER the model contract is completed, will we start leasing to new or more contractors. Hopefully, the DoE can move this model contract forward quickly, but it is certainly wise to place a hold on new contracts until we have a template in place for future business deals. With this pre-designed contract, the standards and expectations will be clearly set, and contractors will not be able to insert any contractual details that are unfavourable to us or which will reduce our windfall.
In the spirit of setting those clear standards, Dr. Bynoe stressed the necessity for updated legislation in the petroleum sector. Legislation should not just bring order to the sector, it should also smoothen relations among contractors, the government and the public. These laws will be public knowledge and contractors must respect them. This will give us, hopefully, a glimpse of what was required from the contractors and since the contract is a template, we will also know the ins and outs of that. Of all the legislative frameworks, the model contract is most important, because it can be applied to all business arrangements; and it will be key in preventing any corrupt behaviour when dealing with new contractors and protecting the integrity of our petroleum sector.
Obviously, this all sounds very ambitious for our government. Dr. Bynoe indicated that the DoE will also be hiring legal assistance to ensure that the new legislation and model contract work in our favour. Whoever is chosen should be adept in dealing with frontier countries without an established infrastructure for the oil-and-gas industry. Since Guyana is not the first to be in this position, I’m sure that there are plenty of international experts to choose from who have experience counselling governments on similar matters. Hopefully, the DoE will inform us of their choice soon.