AFTER more than a year of work, Guyana released its first report for the Extractive Industries Transparency Initiative (EITI) just a few weeks ago. Although this report covers only 2017, it’s an important step towards full participation in the Norway-based EITI.
The EITI is an organisation made up of 52 countries with strong natural resource sectors—in particular, oil, gas, and mining. This organisation is built around the idea that transparency about how resource extraction and its revenues are governed is the best way to ensure that societies fairly benefit from their resources.

Each country that implements the EITI standard has its own secretariat, in our case called GYEITI, and a multi-stakeholder group that helps prepare and review reports on the country’s progress. This 12-member group includes representatives of civil society, industry and government, to make sure that many different groups have line of sight on how resource revenues are managed.

Guyana was officially accepted as a “implementing country” for the EITI standard in October 2017. Since then, with the help of consultants and the multi-stakeholder group, GYEITI has been working on preparing Guyana’s first report, which was released late last month.

The report covers 2017, and so focuses mainly on the mining industry and the regulations and revenue management practices that were in place before the oil industry became a major factor. The report includes a detailed analysis conducted in compliance with international auditing standards and an examination of how resource revenues were reported to and recorded by various government agencies.

It includes data from the Guyana Gold Board, Guyana Revenue Authority, Ministry of Finance, Guyana Geology and Mines Commission, National Insurance Scheme, and the Environmental Protection Agency as well as from corporations involved in the extractive industry sector.

Since the first oil wells won’t start producing oil until next year, the report doesn’t include too much information about what many people will be most curious about—how Guyana is preparing to handle the revenues from its new oil discoveries.

The unprecedented series of 13 successful wells in the offshore Stabroek Block are predicted to generate tens of billions of US dollars over the next decade. How that revenue is managed is naturally going to be a key question in the minds of many people.
More than five billion barrels of oil have been found to date and more discoveries are likely, as drilling and investments are ramped up in 2019. In just the last few weeks, Exxon also made its final investment decision on Liza Phase 2, which will be the second major production area in the Stabroek Block when it comes online in the early 2020s.

Thankfully, what the EITI report does include on oil and gas is encouraging. All of the active oil-and-gas companies fully participated in the data submission for this first EITI report. The report did offer a number of suggested reforms to Guyana’s resource-management practices, mostly in the mining sector.

It called on government agencies to standardise their data, enforce reporting requirements and publish licence registries and mineral agreements in the gold, bauxite, and diamond mining industries—a step that was already taken in the oil industry when the government published its contract with the Exxon-led consortium last year.

Going forward, Guyana’s 2018 EITI report will likely deal much more heavily with oil and gas as billions of additional U.S. dollars are invested in developing wells, facilities, and infrastructure ahead of first-oil production in 2020.

With an increasing number of companies from around the world interested in Guyana, a clear and effective set of laws to regulate foreign and domestic investments, and to manage this unprecedented level of wealth and responsibility will be more important than ever. EITI is playing an important role in the process of preparing Guyana to be a major energy producer.