In wake of a stinging review of Guyana’s Oil and Gas Sector, the Government of Guyana today assured that it is putting the requisite measures in place to mitigate the resource “curse”.
In a statement, the Ministry of Natural Resources said the Government remains committed to its strategic development path, which is being reinforced by the establishment of a pragmatic legal and fiscal Petroleum Management Framework.
The Ministry said the Government 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.
The statement comes days after Jamaican Economist and University of the West Indies Lecturer, Dr Damien King projected that as Guyana’s Petroleum Industry develops, it will likely fall victim to the ‘resource curse’ due to the lack of strong institutions to guard against corruption.
In a Jamaica Observer report, Dr King said it is only time before political parties start to squabble over the spoils to the detriment of the country.
“You mark my words, Guyana is going to go nowhere,” Dr King was quoted as saying.
But, in dispelling the statements, the Natural Resources Ministry pointed out that Guyana has been labelled by leading market participants as the most successful frontier to early-stage production in recent Oil and Gas history.
“Our nation’s exemplary environmental credentials and dynamic policymaking 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 Natural Resources Ministry said.
The Natural Resources Ministry said the current government 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 adherence to international best practices and principles.
It said steps taken thus far include the updating of the principles and conditions of all new Petroleum Production Licences; the enactment of the Local Content Law; the revision of the Natural Resource Fund Legislation to provide greater oversight and management of revenue and the establishment of new environmental permitting conditions and fees among other measures.
The Natural Resources Ministry also noted that the move to swiftly remedy the deficiencies of the Natural Resource Fund Act of 2019 was an important step towards 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,” it said.
It said currently, the model Production Sharing Agreements for both the deepwater and shallow water blocks offshore Guyana are under public review, and work has commenced on overhauling the 1986 Petroleum (Exploration and Production) Act and regulations to a modern and effective legal framework.