Understanding, or not understanding ringfencing
Introduction
Today’s column returns to the very popular topic of ringfencing in petroleum operations. Column 115 appearing in the Stabroek News of November 24 addressed how Belize, a mini-petroleum state, used the industry’s regulator, the legislation and the courts to enforce the principle, to that country’s great credit, quite the reverse in the case of Guyana. Ringfencing is not new to this column, having been the single issue addressed in Column 68 Why ringfencing matters, and why it does not.
Not that our oil czars are particularly interested in such esoteric, finer point of the petroleum sector, or its administration. Even though they should. The Natural Resource Governance Institute, a non-profit independent organisation describes ringfencing broadly to mean a “limitation on consolidation of income and deductions for tax purposes across different activities, or different projects, undertaken by the same taxpayer.”
