Our leaders are still putting in place 30 security measures to protect Guyana’s $$$
Today is the one year anniversary for oil…
Kaieteur News – From an oversimplified perspective, it could be a major achievement. One year since oil production began.
However, it could be far from the truth as the reality is that Guyana has been operating without even half the essentials for the efficient governance of the oil and gas industry.
Even before production began, the country benefited from lessons shared by the World Bank, International Monetary Fund (IMF), United Nations Development Program (UNDP), Chatham House, Natural Resources Governance Institute (Natural Resources Governance Institute) NRGI), the Inter-American Development. Bank (IDB) and killed others.
These organizations made critical recommendations to Guyana on how to prepare to handle the impending influx of revenue from the oil sector along with prudential advice to help mitigate significant safeguards of value loss and corruption.
But a year later, key pieces of advice given were not acted upon. These include:
1. Review of Local Content Policy 2020 by implementing the accompanying legislation.
2. Apply appropriate offshore technology to remotely monitor oil measurement.
3. Outline benchmarks for Corporate Social Responsibility.
4. Establish a Depletion Policy.
5. Establish a Decommissioning Policy.
6. Outline a structure for what to expect in Field Development Plans (FPDs).
7. Strengthening key audit agencies, in particular the Office of the Auditor General.
8. Strengthen organizations that will be responsible for spending the oil money – including the Ministry of Finance, the Ministry of Public Works and the Ministry of Health.
9. Improve Guyana’s ability to monitor and record offshore emissions, particularly in the case of the Environmental Protection Agency (EPA).
10. Provide the EPA with resources so that it can make unannounced visits to the FPSOs in compliance with safety standards.
11. Hire technical experts needed in Ministry of Natural Resources, EPA, Guyana Geology and Mines Commission (GGMC), Guyana Finance Authority (GRA), etc.
12. Review of tax concessions / huge tax breaks. Example: provisions in oil contracts that allow tax exemptions on capital gains tax, personal income tax and withholding tax.
13. Update policy / laws / regulations regarding direct and indirect transfer of benefits in offshore blocks.
14. Establishment of Petroleum Commission.
15. Implement software solutions for monitoring compliance and for implementing necessary controls for oil currency expenditure.
16. Updating laws and regulations to address issues of seclusion, transfer pricing (and other gaps / financial issues), employee health and safety, environmental monitoring (on issues such as torching and severe penalties for breaches) ), pre – eligibility criteria for oil blocks, etc.
17. Outline a vision for the oil sector following citizenship consultation.
18. Strengthen and increase systems for reporting decisions in the oil and gas industry.
19. Strengthen its petroleum finance regime by reviewing the Petroleum [Exploration and Production] 1986 Act (PEPA), the Petroleum [Exploration and Production] The 1986 Regulations, as well as tax laws and other sector regulations.
20. Close other funding gaps in existing Production Sharing Agreements (PSAs).
21. Undertake a policy review of fiscal terms contained in existing PSAs to ensure that these are properly implemented, and assess areas for improvement for future investment.
22. Design a new financial regime that is generally applicable for upstream petroleum projects that increases government take-up and limits the scope for individual negotiations.
23. Introduce a revised production sharing mechanism for new PSAs that gives the government a higher share of profit oil as project profitability increases.
24. Issue a model PSA containing the minimum funding terms accepted by the government for future contracts.
25. Apply tighter fencing arrangements to contracts so that oil companies would not be able to deduct the costs associated with exploring other wells or developing other projects from another oil producing field.
26. Define, document and share a defined national integrated plan for the oil sector with clearly established Key Performance Indicators (KPIs) and timelines for achievement, supported by operational and funding plans to support its action.
27. Thoroughly outline the roles and responsibilities among and within government entities – The IDB advised that good governance requires a clear separation of policy formation and regulatory roles and boundaries while emphasizing that the Department of Energy, Geology Commission and Guyana Mines, Petroleum The Division and the Environmental Protection Agency must implement this separation.
28. Design and implementation of strong legal, regulatory and regulatory frameworks.
29. Develop local talent in line with integrated national plans.
30. Implement well-defined delivery models that promote strong planning, project management principles and strong leadership, management, oversight, technical and administrative capability.