PPP / C Govt. reduces information in the latest oil report
By Kemol King
Kaieteur News – The Ministry of Natural Resources sent a release yesterday, announcing that they have received payment for Guyana’s fifth oil lift from production in Exax’s Phase One Liza operation. Although this report provides some information on lifts dating back to the start of oil production, it is immediately clear that the report includes a much smaller account of oil production and revenue, compared to oil with a report from the Ministry of Finance under the previous administration.
This report comes after a month of advocacy by Kaieteur News for Vice President, Dr. Bharrat Jagdeo, to keep his commitment made during a press conference on Feb. 9, to release reports on Guyana’s production.
The Ministry of Natural Resources said it was “advocating for transparency and accountability within the Petroleum Sector …”
The report concluded by saying, “The Government of Guyana through the Ministry of Natural Resources is committed to providing updates on oil lifts and sales as needed to ensure all stakeholders and members of the public are informed.”
On the fifth lift, the Ministry noted, “On February 05, 2021, 997,420 barrels of oil were raised from Liza Destiny with a value of US $ 61,090,968.03 with a total to date of 5,009,797 barrels of oil worth US $ 246,542,662. Including royalties, the total in the Natural Resources Fund Account is now US $ 267,668,709.12. “
In addition to a single table providing basic figures on the date of loading, oil volume, and the value of each of the five lifts, the above represents this administration’s entire public disclosure of Guyana’s oil and revenue.
A photo attached to this article shows the single page of information from the Vickram Bharrat Administration. Along with this are excerpts from a five-page document provided by the previous administration for January 2020, for comparison.
In stark contrast, the report envisioned by former Finance Minister Winston Jordan, provided pages of detailed information about Guyana, with several tables.
The Jordan report, titled Petroleum Production and Revenue Report, included production information, including all oil produced that month, barrels used to fill facilities, crude residue and cargo tank pipes and the raw unloading point that links to the unloading. ship, whether changes are being made to the volume of ballast crude, whether operational or raw losses were being used for transportation. This information is accompanied by a table, which shows the math to make sure the public knows where all its oil went.
Furthermore, the Jordan report provided information on sales and entitlement, which includes a breakdown of government share and contractor share, cost of oil in relation to cost ceiling, profit oil; with tabular and diagrammatic drawings. The Jordan report also discloses information about transfers to the Natural Resources Fund (NRF), including royalties information. A diagram is shown.
The Jordan report notes the need for the monthly oil reports to be produced, as well as several other reports, for which the law is obliged to publish. It states that “These reports will allow the public to monitor and withdraw deposits in the NRF to ensure that petroleum revenues are managed in accordance with the provisions of the NRF Act 2019. However, these reports may not contain enough information to allow one to determine how government revenues deposited into the NRF are calculated. As such, the Petroleum Production and Revenue Report (RPPR) serves to bridge this gap by providing regular updates on petroleum production and revenue.
Transfers to the Natural Resources Fund
Regular publication of the RPPR will allow for greater transparency in this new sector of the economy, ensuring that the public is fully aware of the amount of petroleum being generated and the revenue being generated . Such transparency is important, given the volume of revenue generated from this resource. “
While former Minister Jordan has set out the legal requirement for these reports, many of these documents expected from 2020, before David Granger’s administration can be dismantled, cannot be found. This lack of information from both ministries, through 2020, will leave the public guessing about its oil revenues and production details, after the precedent for transparency set by Jordan at the start of oil production.
The People’s Party / Civic Progressive Party (PPP / C) administration is planning to replace the Natural Resources Fund Act, and is seeking experts to overhaul Guyana’s petroleum legal framework that is almost completely outdated. However, there has been no amendment to the Act to shift responsibility for publishing these reports from the Ministry of Finance to the Ministry of Natural Resources. Notably, the Act does not specify the extent of the details to be given in these reports. However, not publishing the legally mandated monthly reports on the Ministry of Finance website is breaking the law.