-Department of Energy creating framework for profitable production

OIL production will be the most transformative economic development in Guyana’s history, said President David Granger during a message on the first anniversary of the Department of Energy.

Oil revenues, some of which will be managed by the Natural Resources Fund, will be invested strategically in building human and institutional capacity, addressing infrastructural deficit and providing economic security for future generations, said the President.

The Department of Energy, established on August 1, 2018, aims to effectively and efficiently manage the country’s hydrocarbon resources.
“It will allow Guyana to transition to a cleaner and more energy efficient country through a sustainable pathway,” said President Granger, adding that the establishment of the department is a step forward in ensuring, among other things, capacity-building and the strengthening of the legislative framework in the oil and gas sector.

To that end, the department completed a diagnostic review of the legislative framework that governs the petroleum sector to shape proposals for revision/replacement of legislation. The department also augmented its legal team to advance the work of the department with regards to the revision of the legal framework for efficient governance of the sector.

“The Government of Guyana is committed to transparency in the management of this sector,” President Granger asserted.

Director of the Department of Energy, Dr. Mark Bynoe said Guyana, as a new and emerging energy producer, finds itself in a crucial and unprecedented position in the country’s history; faced with a challenging and complex task of establishing a petroleum sector and developing the country’s expected wealth.

“In the shortest time, it must create a framework for the profitable production of oil and gas that will result in the transition of natural capital from the ground into intangible capital (human and institutional),” said Dr. Bynoe.

He said Guyana must also produce physical capital that in turn will generate benefits for every Guyanese in the present and future generations.
In confronting this new and burgeoning industry, the Government of Guyana established the Department of Energy within the Ministry of the Presidency, with President Granger being the Minister with responsibility for the sector.

The department’s mandate is to manage the nation’s oil and gas resources, while simultaneously maintaining, on a continuous basis, stakeholder engagement on the hydrocarbon sector of the economy.

“These efforts are being laid on the pillars of good governance, efficiency measures, improved transparency, accountability, predictability, balance and evidence-based decision-making within all areas of the oil and gas sector,” he said.

In managing the sector, the department has taken the approach to prioritise those areas of intervention in which the government is likely to have a comparative advantage. This is facilitated by technological intervention wherever possible.

This approach has allowed the department to achieve some measured success with its small, but dedicated staff and unstinting support received from its minister, sister agencies and bilateral and multilateral partners, said Dr. Bynoe.

As the country prepares for first oil and beyond, the Guyanese people can be assured that the department, with its partners, will continue to work assiduously to reduce value leakages.

OPTIMUM RETURNS
It will pursue marketing strategies of Guyana’s crude oil that will bring optimum returns, build out a fit-for-purpose regulatory body, expand the physical and technological capacity within the sector, and focus on making decisions from a position of knowledge.
Dr. Bynoe believes that the future of Guyana is brilliant and promising, but continuing to aggressively push for renewable conversion must be definitive, focused and intentional.
“We are on a journey, but a journey neither for the faint-hearted nor the sluggard, but one for aggressive, industrious and innovative minds.

“A journey where our children can shatter glass ceilings, be what they want to be…where our young men and women can dream dreams to be gainfully employed and be captains of their own destinies, where families can see expanding disposable income and where our seniors can be assured of social, economic and physical security for the remainder of their years,” said the director.

He said the department, with its partners, will continue to work tirelessly to ensure all Guyanese benefit from oil and gas revenues.
Among some of the achievements of the department in the first year was to secure more than US$30 million in financing for the sector. The department will now coordinate all petroleum sector donor activities to ensure focused, cost-effective and efficient support without duplication.

The department also completed the final draft of its local content policy to allow for greater value extraction and capacity-building for all Guyanese engaged in the oil and gas sector.
In addition, working with its partner institutions, the department will commence the first audit of the historical costs associated with the Stabroek Block.

The department also approved Liza Phase 2 Development plan for the second phase of development on the Liza field to enhance the revenue flow of the country. It has also accelerated the drilling programmes for Tullow, Repsol and CGX.

As preparations start for Liza Phase 2, ExxonMobil’s first FPSO to Guyana, Liza Destiny, is expected to arrive here in the first week of September 2019, some two weeks ahead of the initial projections. Dr. Bynoe said Guyana can be truly proud of this.