Category: The Road to First Oil

Introduction

It was good to see Dr. Mark Bynoe, Director/Head of the Department of Energy in the Ministry of the Presidency speaking publicly on the petroleum sector. While Minister Joseph Harmon has been assigned responsibility for the sector by President Granger, and will necessarily be answerable to the National Assembly, the day to day management and oversight of the sector seem now to fall squarely on Dr. Bynoe.

In an interview with the State-owned Guyana Chronicle published last Wednesday, Dr. Bynoe was cautious about any “revisiting, revising, [or] renegotiating” any petroleum agreement but in a masterpiece of officialese, assured the Chronicle that “we” will continue to engage deeply to ensure that value leakage is reduced wherever possible. Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 59)”

Introduction

Amid all the noise about audits and Memorandum of Understanding, it is understandable and not at all surprising that a letter to the editor might have received less attention than it would have otherwise deserved. I suggest to every reader of this column to go back to last Friday’s Stabroek News and read the letter published under the name of Mr. Stephon Gabriel, Communications Officer of the Ministry of Natural Resources. Last Saturday was of course more than six weeks after Gabriel’s Ministry had ceded responsibility for petroleum to the Department of Energy in the Ministry of the Presidency and the timing of the letter raises interesting questions.

That letter, which would no doubt have been cleared at the highest level of the Ministry, made the astounding revelation that the Ministry had been given the strict responsibility (emphasis added) of ensuring ‘first oil’ production by 2020. As if to emphasise the point, Gabriel reported that that was “the preeminent objective over the past three years”. Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 58)”

Introduction

It has been over one month since the Ministry of Finance tabled in the National Assembly a fifty-one page document which it claims presents “preliminary proposals” to stimulate discussion on its plan for managing the flows from petroleum operations following first oil estimated to flow by the end of the first quarter of 2020. Central to the proposal are what is called the “fiscal rule”, embodied in the second element and that is a Natural Resource Fund to be established under a Natural Resource Fund Act.

I have projected that revenue from petroleum within the next calendar decade will account for approximately eighty percent of government revenues with both negative and positive implications for generations to come. Will we go the way of so many countries of which Nigeria, Venezuela and Democratic Republic of the Congo seem to be the poster children, unable to use their natural resources to improve the wellbeing of their people, reduce the wealth and income gap and fairly distribute their patrimony among all their people – born and unborn? Or could we follow the path of Chile and Botswana which have used very similar resources but pursuing a very different path, to transform their countries and the lives of their people? Of course in so many ways, Singapore, without any natural resources, has been an outstanding example, if not of a political model, but of what inspired vision and leadership can do for a country. Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 57)”

Introduction

The 2016 Petroleum Agreement has been a source of grief, anger, disbelief and shock to the average Guyanese whether living inside or outside Guyana. The insulting 2% royalty, the contrived US$18 million for legal fees masked as a signing bonus, and the Government paying the oil companies’ corporation tax liability have evoked extremely strong emotions. It cannot be surprising therefore that some commentators find the Agreement so lopsided that they wonder publicly whether the Government will get anything out of the Contract, as least for some time to come.

In my opinion that extreme level of pessimism is not only not justified but is actually counterproductive.

On the other side of the coin are those like Dr. Henry Jeffrey and Professor Clive Thomas who advocate for direct, unconditional cash payments. In contrast with the pessimists, Thomas boldly mentioned the figure of US$5,000 per household per year which would cost over US$1 billion per year. Later on, Mr. Tacuma Ogunseye moderated Thomas’ generous call by placing a ceiling of 2% to 5% of the gross revenue of Government to meet Thomas’ call. Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 56)”

Introduction

Recall that Column # 54 published in this column last week cited two Emancipation Day speeches, one from President Granger which was discussed at some length in the same column. The other was by Professor Clive Thomas, an economic adviser to the President and co-leader of the WPA, which is a member of the APNU+ AFC Coalition. The press reported that the Professor called on his Party to lobby and support cash payments to every single household as their share of the benefits of oil and gas in terms of cash or cheque received in their accounts.

Events this past week have served to confuse Thomas’ remarks and whether the only figure reported from his speech of “US$5,000 per year or whatever it works out at” was loose, careless or worse yet, reckless, given his standing as an economist of considerable repute. Known for his rather conservative style when speaking as an economist, the audience appears to have reacted most positively to his suggestion. Surprisingly, much of the criticism came from his colleagues in the APNU and the AFC with former Chairman of the AFC Mr. Nigel Hughes immediately challenging the Professor. Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 55)”