IMF stresses transparent framework before oil production starts

Jun 29, 2017 News

With Guyana positioning itself to produce oil by 2020, the International Monetary Fund (IMF) has stressed the importance of having a transparent and rules based framework in place before this phase commences.
On May 24, 2017, the Executive Board of the IMF concluded its Article IV consultation with Guyana. Under this article, the organisation holds bilateral discussions with members usually every year, where a staff team visits the country, collects economic and financial information, and discusses with state officials the country’s economic developments and policies.
On return to headquarters, the staff prepares a report, which forms the basis for discussion by the IMF’s Executive Board.
The IMF Directors upon reviewing the report, lauded the government’s plans to establish a comprehensive framework for managing its upcoming oil wealth, and stressed the importance of having a transparent and rules-based framework in place before production begins.
The IMF’s comments will also come on the heels of the non-disclosure of the Guyana/ExxonMobil Production Sharing Agreement (PSA) as questions continue to mount over the size of the slice of the pie that Guyana will be getting.
The Agreement has not been made public. The local media has been told that the Petroleum Act allows for secrecy.
The government, however, has been assuring time and time again, that it would have brokered the best deal possible.
Guyana is to receive a two-percent royalty on gross earnings and 50 percent of the “profits” of the oil proceeds.
As it relates to framework, the Draft Local Content Policy is currently at the level of consultations. This policy will entail the role that the local labour force and companies will play in the sector.
While this draft policy is being deliberated, ExxonMobil has advertised for several services.
Meanwhile, the Petroleum Commission Bill was sent to a Parliamentary committee for further fine-tuning.
There are also concerns over ExxonMobil’s dealings in other parts of the world.
This publication would have carried a series of articles showing the US Company’s track-record – which from all indications – is somewhat controversial.

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