Guyana’s Ministry of Natural Resources (MNR) has responded to recent comments about the country’s development, which it called an attempt to undermine the progress made to manage its rapidly growing economy.
It was University of the West Indies (UWI) lecturer and economist, Dr. Damien King, who was first quoted in the Jamaica Observer, saying “You mark my words, Guyana is going to go nowhere.” King said Guyana does not have strong institutions to place constraints on tribal attempts to fight over the resource windfall. He even said he prays that Jamaica does not discover oil because of the same risk of the resource curse, though Jamaica has stronger institutions than Guyana.
Guyana’s Natural Resources Ministry said, “Guyana is labeled by leading market participants as the most successful frontier to early-stage production country 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 government highlighted that since taking office in August 2020, it has embarked on a series of initiatives to improve the governance framework and management of the petroleum sector. See list below:
1. Update the principles and conditions of all new petroleum production licences
2. Enact Local Content Law and establish a Secretariat
3. Revision of the Natural Resource Fund Law to provide greater oversight and management of revenue
4. New environmental permitting conditions and fees
5. Conducting Cost Recovery Audits
6. Continuous review and modernising of the legislative framework for the oil and gas sector
7. Updating of the 1986 Petroleum (Exploration and Production) Act
8. Development of Offshore Safety Regulations
9. Development of Hydrocarbon Environmental Management Regulations
10. Inter-agency collaboration to improve monitoring capabilities (MNR, Guyana Geology and Mines Commission, Guyana National Bureau of Standards, Guyana Revenue Authority)
11. New model contracts
Guyana has received more than US$2 billion in direct oil revenues since the start of oil production, and annual revenues are expected to increase further by the end of the decade. Government has committed to using a sizeable portion to modernise physical, social and energy infrastructure.
Many of its manifesto promises where oil is concerned are being fulfilled, except for the establishment of a petroleum commission. The commission would be an independent body of technocrats that manage the sector, so politicians are kept at arm’s length. There’s no timeline for the new Petroleum Commission legislation, which was promised, and the government has been criticised for this. When asked, authorities have said that the plan to establish a Petroleum Commission has not been abandoned.
The government said it remains committed to avoiding the resource curse.
