While the International Monetary Fund (IMF) has advised that a business case does not exist for a National Oil Company (NOC) in Guyana, Vice President, Dr. Bharrat Jagdeo firmly asserts that the financial body does not decide or determine what is in the best interest of Guyanese.
During a press conference on Friday, Dr. Jagdeo said he has worked with the IMF for a very long time and while the government listens to advice from various quarters, it is the government that will make a decision on what is good for its people.
“Often, the IMF doesn’t look out for our people, and I will make this clear, the IMF has a different mandate; they were set up, designed as an institution to deal with balance of payment problems around the world. They are not a development institution; they don’t even have expertise in oil and gas. They are a macro-economic type of organisation,” expressed the Vice President.
Taking this into consideration, Dr. Jagdeo said the government will decide what route it will take for the allocation as well as for state participation in the remaining oil blocks.
Dr. Jagdeo said the administration made it clear early on that no foreign company would enjoy access to concessions, whether onshore or offshore, in the manner that existed prior to the discovery of oil and gas. He said an auction would be pursued.
Since making this position known, Dr. Jagdeo said the government has had to consider what format would be utilised for the auction. One of the options on the table, he said, is to auction the blocks following seismic studies. “So that means we would have to invest money in the seismic studies and get the vessels in here and get the information and then put it to auction; that could take more time and would mean upfront expenditure by the government,” he explained.
Alternatively, the economist said the government could auction the blocks as is, which could attract less lucrative offers but nonetheless would save the government the headache of doing the seismic studies.
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He said too that since in opposition, it was considering whether to take every bit of remaining land, on and offshore, and put it under a NOC umbrella with a strategic operator holding the reins. He said the government did consider the cons of such an option, one of which entails the difficulties that would be encountered in raising money to support its share of the expenses given the global commitment to net zero emissions by 2050. The Vice President said, “The mood now is NOCs have difficulties in raising funds. I was in Ghana, and they told me of the difficult time they were having with their NOC, going to the market to raise funds, because of the position of the developed world. So, we recognize that is an issue and we now have to find a balance.”
Dr. Jagdeo said the foregoing variables are being considered and a decision will be had by September. He stressed however that the said decision will be that of the government, not the IMF. “We can listen to advice but people who don’t look out for us can make a bland statement like that (i.e. there is no business case for a NOC in Guyana) so I don’t place too much importance on what IMF said.”
