–Natural Resources Ministry affirms

SINCE assuming office in August 2020, the People’s Progressive Party Civic (PPP/C) has been working to transform the governance framework and management of the petroleum sector by effectively developing and implementing various policies and programmes, which allow for the adherence to international best practices and principles.

In a statement issued by Ministry of Natural Resources (MNR) on Tuesday, the government further reiterated its commitment to enhancing the country’s petroleum management through the implementation of measures to mitigate risks of corruption and occurrence of the resource curse, which are common in some oil and gas or resource rich countries across the world.

“Guyana is labelled by leading market participants as the most successful frontier to early-stage production country in recent oil and gas history. Our nation’s exemplary environmental credentials and dynamic policy-making to facilitate expeditious offshore exploration and development activities underscore Guyana’s role-model status for oil and gas development strategy in the energy transition environment,” the statement said.

The statement was issued to address recent remarks made by University of the West Indies lecture and Jamaican Economist, Dr. Damien King, who sought to undermine the progress made towards the prudent management of the Guyanese economy and the shared development vision of the government and its people.

According to a story published in the Jamaican Observer based on an interview, Dr. King opined that Guyana lacks strong enough institutions to prevent corruption, and chances of the resource curse occurring.

However, Dr. King’s remarks comes just a few months after the International Monetary Fund (IMF) had commended local authorities for the progress made in strengthening Guyana’s anti-corruption framework and fiscal transparency. The IMF assessment was made in a report documenting the conclusions of its Article IV Consultation with local authorities.

The IMF had said that several pillars of the anti-corruption framework in Guyana had been strengthened, including the Integrity and Public Procurement Commissions and the National Procurement and Tender Administration Board.

The MNR said that the government remains committed to even further strengthening of anti-corruption measures.

“The government remains committed to a strategic development path reinforced by the establishment of a pragmatic legal and fiscal Petroleum Management Framework, and is confident that the country’s practical, academic and industrial intelligence will ensure that policies and programmes are implemented to avoid the resource curse syndrome to our multi-sectoral economy,” the statement said.

The ministry pointed to a list of measures that have been taken by the government that has seen the country crafting a strong global energy reputation, including an update of the principles and conditions of all new petroleum production licences, the revision the Natural Resource Fund Law to provide greater oversight and management of revenue, new environmental permitting conditions and fees, the conducting of cost recovery audits, and continuous review and modernising of the legislative framework for the oil and gas sector.

The government also plans to update the 1986 Petroleum and Exploration Act, develop offshore safety regulations, and pursue the development of Hydrocarbon Environmental Management Regulations and inter-agency collaboration to improve monitoring capabilities.

REMEDYING DEFICIENCIES
The ministry pointed to the government having remedied the deficiencies of the Natural Resource Fund Act 2019 with the Natural Resource Fund Act 2021, noting that it is an important element in safeguarding against the resource curse, ensuring fiscal smoothing and advancing the quest of intergenerational wealth while utilising petroleum wealth to finance national development priorities.

“The PPP/C administration scaled back the excessive power of the Minister of Finance — removing the possibility of ministerial direction in determining the ceiling on withdrawals, established a Board of Directors — vesting the Board with powers previously concentrated in the hands of the minister and removed the possibility of any expenditure from the Fund being met without prior parliamentary approval,” the statement noted.

Moreover, to maximise value extraction from Guyana’s petroleum resources and remedy pressing issues, Local Content Legislation was enacted in 2021.

“Today we see the growth of the Guyanese economy driven by a vibrant local private sector. The Model Production Sharing Agreements for both the deepwater and shallow water are being developed with a public review period, and work has commenced on overhauling the 1986 Petroleum (Exploration and Production) Act and regulations to modern and effective legal framework,” the statement said.

In another statement on Wednesday, the Ministry of Natural Resources also addressed recent report in the media that questions the government’s responsibility in managing the audit of costs proffered by the Stabroek Block operator.

The ministry said that the Vice President, Dr. Bharrat Jagdeo, who plays a leading role in the judicious management of Guyana’s oil and gas sector, has repeatedly, by way of numerous press conferences, articulated updates relating to the management of the oil and gas sector, more particularly the conduct of audits.

Moreover, the Minister of Natural Resources, Vickram Bharrat, in his presentation as part of Budget 2023, indicated publicly to the House that a preliminary audit of the 2018 to 2020 costs submitted by the Stabroek Block operator had been prepared, kick-starting the sixty day reply period that the operator, Esso Exploration and Production Guyana Limited (EEPGL), is entitled to.

During those 60 days, the operator is given an opportunity to review and issue a reply to the government following the receipt of the report. It is the ministry’s understanding that this period is yet to elapse.

“Pursuant to the Production Sharing Agreement (PSA) between the contractor and the government, specifically under the Auditing and Inspection Rights of the Government, the minister has a legal right to carry out further investigation within sixty days of the contractor’s reply, should the report or reply require further investigation,” the statement noted.

The ministry said too: “The Ministry of Natural Resources will remain steadfast in achieving its goals in the expansion of the hydrocarbon sector, its sustainability, environmental soundness and lucrativeness, and will not be distracted by characters aimed at misinforming, misguiding and sensationalising matters.”