THE Guyana Oil and Gas Energy Chamber (GOGEC) has described the 2022 National Budget which was presented to the National Assembly on Wednesday, as one of the most “compelling” budgets ever produced in the country’s history.

Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, during his five-hour presentation, laid out government’s plans for the development of Guyana and a slew of measures that would improve the lives of Guyanese.

The chamber, in a press release, expressed its satisfaction with the critical facets of the revised Low Carbon Development Strategy (LCDS) slated for implementation this year and the enhancing of energy access, affordability, and a commitment to transitioning to renewable energy in the face of prolific performances in our new offshore oil sector, that was mentioned during Minister Singh’s presentation.

“The oil and gas sector will continue to drive strong double-digit growth over the medium term. In 2022, production capacity is expected to increase to 340,000 barrels per day (bpd) from 120,000 bpd, with Liza Unity FPSO coming on stream in early 2022,” GOECEC said.

According to the release, the current estimate of the gas reserve is 16 trillion cubic feet (Tcf), with projections from Liza One and Two likely at 50 million standard cubic feet per day (mmscfd). Payara will bring an additional 20 mmscfd.

In the third quarter of this year, the government will hold its first-ever competitive bidding rounds for available acreages of offshore blocks. This is a critical step towards enhancing the value capture from available blocks transparently and optimally. Based on projections of oil production, oil revenues are expected to reach US$958 million by the end of 2022 and US$1.8 billion by the end of 2025.

“GOGEC welcomes measures to reduce the fiscal disparity between local and foreign companies operating along its value chain. These measures will further accelerate the participation of local firms in the sector,” the release said.

According to GOGEC, the revised Local Content Act will support the convergence of national and foreign interests in our finite resources, paving the way for equitable and sustainable development for generations to come. This, it added, is a solid adherence to the Natural Resources Governance Institute (NRGI) precept five (local effects) and precept 10 (private sector development).

Greater support to small businesses in the budget will continue to nurture start-ups and position young Guyanese in the pathways for partnerships and knowledge transfer with foreign partners. As such, GOGEC is encouraging continued investment by both government and the private sector in prioritising ISO certifications to comply with globally recognised standards in services essential to harnessing the immense forward and backward linkages afforded by the oil and gas sector.

Similarly, it said that the commercialisation of the various offshore discoveries will strongly impact the labour market dynamics of the Guyanese economy. In particular, the demand for oil and gas-related skills will increase as the oil and gas industry becomes more entrenched in the productive economic landscape of Guyana.

GOGEC sees the push towards a low carbon economy as a necessary measure in this new climate paradigm.

“We are pleased to see the injection of funding to accelerate the development of the transformative gas-to-energy project and the Amaila Falls Hydro Power Project. These strategic investments will unlock private sector transformation that embraces more significant value creation through light and heavy processing and a more diverse and modernised service sector and digital economy,” the release said.

It noted that small-scale hydro projects at Kumu, Moco, and Kato and off-grid solar projects will significantly improve access to affordable energy services with high-quality standards to develop the communities in the interior.

Establishing a coordinated approach for the electrification of the interior is commendable, it emphasised before adding that this seeks to narrow the disparity between rural and urban areas and pave the way to a robust digital future for our indigenous peoples and rural communities.

For future consideration, GOGEC says it will continue to engage with the government to better leverage private sector participation in the accelerated diffusion of renewable energy technologies, including e-mobility solutions. The initiative to implement electric vehicle (EV) charging is excellent and sets an example for the shift to a more sustainable and environmentally friendly country.

However, GOGEC is recommending that the solar EV charging stations be set up across all government buildings and for government vehicles to lead the shift to a fully electric vehicle fleet.

Additionally, it recommends that the government consider a reduced tax rate for hybrid and plug-in hybrid vehicles. This according to the GOGEC, this will encourage customers to purchase more environmentally friendly cars, therefore, reducing the emission of CO2. Also, to further expand the ecosystem of enabling policies, the government, it said, may consider subsidies for installing the Solar PV configurations for residential EV charging.

Measures should be extended to the complete solution, which includes: panels, inverters, transformers, and batteries.

“GOGEC looks forward to advocating for the equitable development of all energy resources and the households and industries that rely on them. In this manner, GOGEC continues to applaud proactive policies set out in the National Budget and the Low Carbon Development Strategy,” the release added.