…no petroleum commission, no local content, no safeguards for Guyanese
ExxonMobil has started pumping oil but while feelings of nationalistic pride run high, there is also worry considering the Government’s poor track record of managing the sector – ranging from lopsided agreements to the almost non-existent legal framework.
This was pointed out by the People’s Progressive Party (PPP) in a statement on Saturday. According to the party, President David Granger’s declaration of National Petroleum Day and protecting the country’s patrimony ring hollow since for four years little was done in this regard by the Government.
“Granger should be ashamed to have made a proclamation about ‘National Petroleum Day’, considering the coalition’s unenviable list of failures in the oil and gas sector. More so, he should be ashamed that his declaration came on the anniversary of the successful and valid passage of the No-Confidence Motion, which resulted in the fall of his Government”.
The Party cited a number of failures, including the Government’s failure to inaugurate a Petroleum Commission which would have had some amount of oversight from civil society. Instead, Government has seemingly fallen back to rely on the Department of Energy which reports directly to the President.
Another failure the Party cited was the lack of a Local Content policy, which, after several drafts, has still not been completed. Already, a number of persons from civil society and the private sector have complained about opportunities being snapped up by foreigners.
The Georgetown Chamber of Commerce and Industry (GCCI), having identified a number of weaknesses within the policy, including the most obvious one of the lack of penalties for delinquent operators, had sent out an analysis on the document.
They had said that with no penalties to hold operators accountable to their commitments and international principles of providing employment and business opportunities for Guyanese, “handshakes” and good faith are not enough. The Department of Energy had, however, announced on Monday last that it is putting the final touches on the draft policy.
The Party also lambasted the Government for setting up a Sovereign Wealth Fund (now dubbed the Natural Resource Fund) that by not keeping politicians at an arm’s-length in keeping with international practice gives the Finance Minister authority over the fund. According to the Party, should it win elections next year, it would set up the regulatory framework for oil and gas in six months.
“The other controversial issue is the move to sell Guyana’s share of ‘first oil’ that is lifted by ExxonMobil. It should be a source of shame that it was the international media house, Bloomberg, which exposed the APNU/AFC coalition’s plans to approach traders directly, ‘face-to-face’, to conclude deals for them to buy Guyana’s oil and sell it.”
Granger is a caretaker President who is heading an unconstitutional government since March 21, 2019, the PPP noted.
“His coalition’s purpose in office is the holding of General and Regional Elections, not to bind Guyana to ‘shady agreements’ that would see our people losing more. The question that must be asked is why is there a rush to tie up an agreement for the sale of Guyana’s share of oil?”
The Party expressed that under the APNU/AFC Government, there are no guarantees that petroleum production will transform Guyana’s economic development and improve the well-being of the people.
Moreover, the Party noted that President Granger’s record in office outside the oil and gas sector reflects more failure, which, it said, includes increased borrowing and tax collection, wasteful spending and depletion of the foreign reserves; poor delivery of public services, especially in the health sector; lack of any viable plans for housing, increased cost of living and worrying levels of crime.
“Granger ignores the fact that development, success and prosperity are the results of positive policies – something his coalition seems incapable of formulating. His fixation on ‘good life’ speeches will not translate into progress and prosperity for our people; the hard work has to be put in,” the Party said.
The PPP, adding that to make matters worse, there is also no national oil company, no depletion policy and no oil spill contingency plan. While Government has been almost mum on the first two, it is understood that the contingency plan is a work in progress that is long overdue.
There has also been no completed audit of the billions of US dollars that have been claimed by oil operators in cost oil, although one has recently started. And by Department of Energy Director, Dr Mark Bynoe’s own admission, there is no penalty for companies who mislead authorities about cost oil claims.
There is also no ring-fencing provision to protect Guyana from costs being transferred from one well to another. There is, in fact, not a single oil-related bill that has been tabled by the Government and made into law, with the exception of the National Resource Fund Act.
