Safeguarding against the “short stick” in oil and gas development
GINA, GUYANA, Thursday, January 26, 2017
Internal and external measures are being taken to ensure that Guyana does not end up being short changed in the development of the oil and gas sector.
This assurance was made by Minister of Natural Resources Raphael Trotman during a recent interview with the Government Information Agency (GINA).
Minister Trotman said the challenge is sorting through the information being provided to ensure that what is used is specifically tailored to Guyana’s needs. “We have to be able to sift through what is in our best interest and what is not, what we need to attend to immediately, what we can put for later down the road. So it is a challenge but I can say at the Ministry itself, we’ve risen to the challenge,” the Minister asserted.
The Minister noted that measures are being put in place particularly to ward against corruption. Internally, legislation like the draft Sovereign Wealth Fund Bill and Policy and joining the Extractive Industries Transparency Initiative (EITI) are part of efforts to promote open and accountable management of the extractive sector.
“We are working very steadily to put in place the EITI,” Minister Trotman said. Persons have been identified to make up the Multi-Stakeholders Group (MSG), a key requirement of the EITI. A functioning EITI secretariat is expected to be established by early February with the aim of furthering Guyana’s bid to become a member of the international EITI body, the Minister explained.
Guyana continues to receive support from international partners and donors as it prepares for oil production by 2020. Among the agencies and donors offering support are the UNDP and Chatham House. The United States, United Kingdom and Mexico are among the countries also lending their expertise to Guyana in the development of its oil and gas sector.
“There are a number of areas of support and what we have to ensure is that we put them in a number of compartments so that we are not relying or are overly reliant on just one bit of advice from one country or one source,” Minister Trotman explained.
Meanwhile, Minister Trotman pointed out that one of the features to be included in the Sovereign Wealth Fund is the portioning off of revenues from the other extractive sectors. “We start getting into the discipline now by putting aside a portion of the revenue for gold, from timber, from manganese and from diamond so that by the time oil revenue comes we would have had gained both experience and become more disciplined in managing our resources,” the Minister said.
“The whole aspect of the shorter end of the stick is both internal and external and we are making arrangements at both ends,” Minister Trotman said.
Since the first significant oil discovery in 2015 to the official announcement of commercial oil quantities by oil giant ExxonMobile last year, Guyana has been actively preparing for oil production. The oil find is equivalent to more than 1.4 billion barrels of recoverable high quality oil.
By Tiffny Rhodius