While not seeking to insert one’s view on the Budget 2018 debate, which kicks off today (December 4, 2017), there are some important fundamental pronouncements contained in the Budget speech as they relate to the emerging Oil and Gas (O&G) sector. No doubt, further fleshing out of the details and constructive interventions, aimed at improving and adding TO these pronouncements, would be a more desired approach in the coming days.
Welcoming is the fact that stakeholders were given a clearer perspective in terms of the anticipated institutional framework for the management of this new, game-changing sector. There was clarity when it was badly needed as to the priority for the institutional framework for the sector so it can be managed efficiently.
The big-ticket issues addressed are plans to create a Sovereign Wealth Fund (SWF), on-going revision of the template of Production Sharing Agreements (PSAs), operationalisation of the long-anticipated Petroleum Commission and exploring the feasibility of natural gas as a source of energy generation. Other important areas, I am sure that will surface in the debate, will include Local Content with the necessary legal teeth, establishment of a national petroleum company, and disclosures of PSAs and other associated agreements (these I will continue to address in subsequent columns).
The matters, taken together, can set in motion a chain of events and interventions, if handled efficiently and transparently, will add to confidence in our desire to do well in managing the O&G sector and dilute the growing skepticism about our ability, as a people, to manage this up and coming transformational sector loaded with associated risks.
Now that there are clear commitments to certain action, expectations will soar to develop the best model suited for Guyana, along with timely and efficient implementation. Extra-efforts will have to be taken to address the negative perception, in some sections, as to our ability and commitment to do what is best in the interest of all.
In so doing, those who are empowered under the law and entrusted with statutory responsibilities must not have their hands tied and every action (mis)construed as an attempt to manipulate and mislead. At the same time, demands for open and healthy debates along with inclusive and participatory mechanisms can only inspire greater trust and confidence in the processes for building a resilient O&G sector.
It would be deceptive to think that mapping out a course for a sound management framework for the O&G sector starts and ends with providing effective leadership alone. Responsible followership could be part of the solution, if not the panacea. The two must work in tandem.
The policy initiatives alluded to by the Minister of Finance and other steps ventilated on by the Natural Resources Minister, as well as those comments by political and civil society stakeholders, can forge the much needed syncronisation of effective leadership and responsible followership.
Preference for dialogue, as against antagonistic postures and casting of aspersions, would augur well for the successful formulation and implementation of the necessary O&G management framework. In the same vein, given the power of the media (traditional and new) responsible reportage of O&G activities as against sensationalism is critical for our nation being successful in preparing for the new sector.
The planned 2018 outreaches for the O&G sector, the Guyana International Petroleum Business Summit, the deliberations on SWF, the review of the Petroleum Commission Bill and other direct and indirect issues will be occasions for all committed stakeholders to achieve the balance of effective leadership and responsible followership.
For now, some of the matters raised in the Budget concerning O&G can offer the much-needed opportunity for a more sober, less divisive examination of what is required for this new sector. It is important to demonstrate that as Guyanese we can take care of our own business TOGETHER, if we want to!
(The writer Robert M. Persaud (robertmpersaud.com) is the Former Minister of Natural Resources and the Environment, and now the Managing Consultant of Georgetown-based Ipower Consultancy. Send feedback to: [email protected])