Guyana must be prepared in shortest possible time for first oil
-President tells visiting IDB team
President David Granger yesterday told a visiting IDB team that Guyana must be prepared in the shortest possible time for the coming of first oil.
According to a Ministry of the Presidency press release, he “stressed that it is incumbent upon the Government to make decisions that are best for the sector and the country”.
He added “This meeting is an important step in our need to make decisions and build capacity. It gives us an idea of what must be done and the IDB has been most helpful in this regard. I admit that there is urgency because of what is currently happening in the sector. Much of it has to do with our capacity and capabilities. We understand the importance that must be placed in these two areas”.
With first oil expected as early as next month, Guyana is without key parts of the legal architecture needed for the oil and gas sector as the current government has been acting as a caretaker administration since December 18, 2018 and it is doubtful whether the outstanding legislation can now be passed.
The ministry release said that Granger met the team from the Inter-American Development Bank (IDB), at State House, to discuss the strengthening and capacitybuilding of the Department of Energy (DoE) as the country prepares for first oil.
Head of the DoE, Dr. Mark Bynoe said in the release, “the meeting basically looked at two elements that were pre-conditions for the policy-based loans. One was for the completion of an organisational structure, standard operating procedures (SOPs), indicative budget along with future directions that the department should be heading in.
It also allowed us an opportunity to assess where we are and to focus on where we should be. The options that were presented were multiple and so it offers Government now a basis for better decision making going forward.”
Bynoe said that the IDB has been supportive of the Government and the Department through the provision of technical aid such as the hiring of the DoE’s Technical Advisor, Matthew Wilks and in the development of the ProductionSharing Agreement (PSA) manual.
The release noted that in December 2018, Guyana signed an agreement with the IDB for a US$11.64 million policybased loan. The project is intended to support the strengthening and sustainability of the Energy Sector in Guyana by contributing to the institutional development of oil and gas governance and the development of cleaner energy sources for electricity generation.
The specific objectives of the loan are to develop a management and planning framework for Guyana’s oil and gas sector and to contribute towards the development of a policy framework so that Guyana may diversify its electricity generation matrix utilising cleaner or renewable sources.
The agreed-upon policy commitments of the first tranche of the programme were the setting up of the DoE within the Ministry of the Presidency to assume responsibilities related to the oil and gas sector; the approval by the DoE of a draft roadmap for Guyana’s oil and gas institutional framework, and the design of a model contract for PSAs.
Following this, the agreed-upon policy commitments for the second tranche were the development, for the DoE, of a functions’ manual, establishing its organisational structure, budget and staff allocation, a PSA set of protocols and mechanisms for contract management; and an oil and gas depletion policy, designed by the DoE and presented for approval to the Ministry of the Presidency.
In this regard, the release said that the IDB team discussed several policy options with the Government, which are geared towards strengthening and building the capacity of the DoE and for the regulation of the oil and gas sector.
Granger was accompanied by Minister of State, Dawn Hastings-Williams; Minister of Finance, Winston Jordan and Bynoe.
The IDB team was led by Country Representative, Sophie Makonnen and included Sector Specialist, Lenin Balza; Executive Leader, Advisory Services, Cassandra Ramkerrysingh and Executive Director at Ernst and Young Services Limited, Salvador Mancilla.