Oil and The Future…The Crucible of our Time

By Raphael Trotman MP,
Minister of Natural Resources

Many adjectives and superlatives can be used to describe today’s happenings not just what is unfolding at this instant at the Georgetown Marriott, but overall, I am speaking about what is taking place within Guyana and around the world following on the announcement of a ‘significant’ discovery 200 km offshore Guyana’s territorial waters – “historic”, “transformational”, “transcendental”, “outstanding”, “stupendous”, and “exciting” are some words which spring to mind and have been used. For me, I believe that the coming oil production is all these and even more.

The 2015 discovery, and the economic fortunes it portends for Guyana, has to be seen against a backdrop of centuries of the enslavement of Africans, decades of indentureship of East Indians, Chinese, Portuguese, and the displacement of perhaps millions of our first people, the Amerindians. Political independence in 1966,

Raphael Trotman

Republicanism in 1970, and the socio-political and socio-economic and even geo-political realities and tensions that followed these events, have all combined to present to us, in the first quarter of the new millennia, the crucible of our time. The history of Guiana, Dutch, French and British in a pre and post-independence era has been one of struggle and antagonism; many of which remain today. It is into this melting pot that the petroleum industry has to be placed. And after all that we have endured, the Guyanese people are owed a better life and this discovery presents such an opportunity – once handled delicately and deliberately.

How do we successfully and sustainably manage the resource of petroleum that has been bequeathed to us without imperilling ourselves, our children, our environment, and our sovereignty. This is why I say that we face the crucible of our time.

Providence perhaps determined that in our 50th year as an independent nation the gift of a bountiful patrimony would be lifted out of the earth and placed into our hands. Where we go from here will determine not only the next 50 years, but the next millennia. What is therefore required is a whole of government, whole of industry, whole of society and whole of country approach.

Partnerships are a sine qua non for success and these have to be intra-governmental, inter-governmental, between government and the operators, between government and civil society, between government and the people of Guyana, and most importantly between and amongst the people themselves.

Certainly, we in government do not claim omnipotence or omniscience – far be it for us to make such a vaunted claim. We cannot do all that has to get done if we attempt to do it all alone and so Government is seeking partnerships with individuals, groups, associations and even countries that are prepared to work in the best interest of Guyana and its people, like-minded partnerships. At the same time, we need to accept that there is a measure to which we can obtain advice and assistance at any given time.

So, we seek stronger partnerships with the Guyana Oil and Gas Association, the Private Sector Commission, the African Business Round Table, and the Guyana Manufacturers and Services Association and the Chambers of Commerce as industry representatives and with civil society organisations such the GHRA, APA, GOIP, ACDA, the Indian Arrival Committee, and National Toshaos Council to name a few.

So what have we been doing for the greater part of 20 months? We dubbed 2016 as ‘the year for preparation and now 2017 we refer to as ‘the year of implementation’. We have forged partnerships where none existed with the Chatham House – the Royal Institute of International Affairs, and the New Petroleum Producers Discussion Group and the Mexican Government’s Petroleum Institute and strengthened relationships with the United Nations Development Fund, World Bank, the Common-wealth Secretariat and US Department of State. In particular, the Mexican Petroleum Institute will in the first part of our understanding develop three white papers that will inform and guide institutional and regulatory strengthening and point the way towards the establishment of a Petroleum Institute.

Additionally, we have retained experts and are at present assessing ExxonMobil’s and other operators’ applications for production and exploration licences respectively. Further, we are considering a proposal from one of the world’s leading offshore supply companies to establish a world-class base at Crab Island, Berbice, and are examining the possibility of utilising some of the available natural gas from the Liza field for energy generation as we transition to renewables. Lastly, we are addressing, in advance, the viability of a refinery or refineries in Guyana.

In so far as policy and legislative initiatives are concerned, we have completed a raft of legislative and policy drafts and updates;

These include:

  1. Updating Guyana’s National Upstream Petroleum Sector Policy
  2. Creating Guyana’s National Local Content Policy
  3. Revised our model Production Share Agreement (PSA) with assistance from international law firms
  4. Updated the 1986 Petroleum Exploration and Production Legislation and Regulations
  5. Fashioned a draft Sovereign Wealth Fund Bill
  6. Drafted Petroleum Taxation and Fiscal Legislation
  7. Completed the drafting and consultation process for the establishment of the Petroleum  Commission of Guyana – Petroleum Commission of Guyana Bill {for submission to National Assembly}
  8. Working towards establishing a Petroleum Scientific Institute (2018/2020)
  9. Ensuring that we have a National Oil Company (2018)

Going forward, the Ministerial Sub-Committee of Cabinet that comprises: the Ministers of Natural Resources, Finance, Public Infrastructure, Agriculture, Business, Communities, Social Protection, Education, Public Telecommunications and Citizenship will continue to meet to ensure that Government, through its Ministries and Agencies, will bring its entire weight to push at the wheel and we propose to engage the industry and civil society organisations to examine the means through which we can create a more inclusive platform for the exchange of views and ideas. There is much planned for this year and into 2020 and the details will be shared as we continue the roll out of the outreach programme using the theme: “Guyana Rising! From Potential to Prosperity”.

All that we do has to be bracketed by a set of considerations that remind us –

  • to be cautious as we go about our preparations – recalling that there are those with vested interests in seeing us failing as a nation and within our society there are as many cynics as there are optimists.
  • to be inclusive in our decision making; and
  • to be decisive and not lose the initiative that presents itself now as the opportunities can evaporate as quickly as do vapours of gas.

Whatever we do, we must do so together to build a stronger Guyana.

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