He noted that while investment conferences are good, there must be clarity on government’s policy. “We don’t need an investment conference to raise interest. There is high interest globally… there is no shortage of persons/ companies with interest in Guyana.
However, if you speak to the investors, they need clarity on the government’s position on a few matters. This is where the government has been weaving a tangled web,” Jagdeo said.
He noted that there are several major elements of the management architecture of the oil and gas industry that raise eyebrows – the Petroleum Commission; the Sovereign Wealth Fund; Local Content Policy; and the process that will be used to make use of the remaining oil blocks for the benefit of Guyana’s development.
The Petroleum Commission, he argued ought to be a purely technical commission, but in currently configured in a way that gives excessive powers to one Minister of Government – the Minister determines: the size of the establishment; the employment of staff and the terms and conditions of employment; the provision of equipment and use of funds; reorganization or such works of development as to involve a substantial outlay on capital account; training, education and research; the disposal of capital assets; and the application of the proceeds of such disposals. “Clearly this is the wrong signal,” Jagdeo said.
On the Sovereign Wealth Fund, he noted that a statement of principles on which the establishment of the Fund would be based would have sufficed. As he has done on previous occasions, he stressed the need for there to be: an apolitical approach to setting up the Fund; a clear definition of the purpose of the Fund; clearly defined rules on spending from the Fund; clarity on what share of oil proceeds will go to the Fund; and the conditions under which the government can access the Fund. “This model can last for the future and is one that is akin to Norway’s model,” the Opposition Leader said.
Relative to a Local Content Policy, Jagdeo proffered the view that a strong local content policy will allow Guyana to safeguard opportunities for locals and not allow locals to be crowded out in the sector. “This is vital for local private sector and local people,” he said.
Jagdeo added, “…we do not have clarity on whether there will be a competitive auction for the remaining oil blocks. Trotman gave one licence, which was effectively flipped to a bigger company…there are more investors than we have blocks. And we need clarity or we will be subjected to more backroom deals.”
The former president also repeated his call for the US$18M signing bonus to be placed into the Consolidated Fund, with the rest of state revenues, and not be kept in a separate account in contravention of Guyana’s laws.
“There was not a single attempt to answer pressing questions….there has to be clarity of government’s policy in a particular sector,” the Opposition Leader stressed.
Notably, GIPEX 2018 was organised a means of presenting investors with an avenue to explore the potential of Guyana’s emerging oil and gas sector.