On the heels of nine major discoveries offshore Guyana by ExxonMobil and its partners HESS and CNOOC Nexen and with the recent announcement of a major resource estimation by Eco-Atlantic, former Minister of Natural Resources and the Environment Robert Persaud believes it is time to talk about amending the Public Procurement Commission Act.
Noting that the direction in which the newly created Department of Energy seems to be moving is commendable, he said that it is necessary to update the procurement framework in light of the forward movement of the burgeoning petroleum industry. Head of the DOE Dr Mark Bynoe had told OilNOW that among his priorities for the Department are coordinating the execution of ExxonMobil’s cost recovery and executing a second round of consultations on the Petroleum Commission Bill.
“Dr Bynoe has his priorities right. Excellent decision to further solicit input on the draft Petroleum Commission Bill to get broad stakeholders’ input. This is crucial for the effective regulation of the oil and gas sector,” Persaud stated.
He said the planned comprehensive audit of ExxonMobil and its partners HESS and CNOOC Nexen cost recovery claims “is very essential to ensure our people’s interests are properly served.” He pointed out that not only must these audits be executed diligently, but that they must also be made public for stakeholders’ review and comments.
Further, the former government official said that given the quantum of business that will be executed in the oil and gas industry it is necessary to update the existing procurement framework.
“Importantly too, both the Government and Opposition must consider the need to urgently amend the Public Procurement Commission Act to also cover provision of services and goods contracts executed by oil and gas companies during the [exploration] and production phases. Why? These companies are spending public revenues amounting to billions of dollars, in advance, on behalf of the State of Guyana. This will ensure the expenditures are done in compliance with national laws,” he said.
He added that with an updated procurement framework, contractors and sub-contractors will be assured of fairness of treatment and transparency in accordance with national laws. “This too can, indirectly serve the cause of local/national content. The more oversight and recourse to national watchdogs we have, the more the populace will feel that their interest is served and thus creating a better enabling environment for operators in the oil and gas sector,” Persaud opined.
He pointed out that Guyana’s oil and gas sector is both new and unique and must not be treated as a regular sector. “We have to be both creative and innovative in service of this new game-changing sector. Happily, we are seeing steps in this direction,” he said.