Govt. faces monumental task to adequately prepare for oil production in allotted time

Aug 30, 2017 News

– Former Petrotrin Chairman

By Abena Rockcliffe-Campbell
Former Chairman of the Petroleum Company of Trinidad and Tobago (Petrotrin), Donald

Former Chairman of Petrotrin, Donald Baldeosingh

Baldeosingh thinks that Guyana is too far away from the place it is supposed to be in getting ready to welcome an oil industry.
Kaieteur News conducted an exclusive interview with Baldeosingh, and it was during that interview that Baldeosingh highlighted the fact that Guyana is in the midst of a very important era in its history.
The Trinidad national said that it is imperative, for the sake of a brighter future that the relevant authorities adequately prepare for a full-fledged oil industry.
Baldeosingh said that Guyana’s oil window of opportunity may be closing even while it is opening. He gave credence to his statement as he pointed to the fact that the world is weaning itself off of carbon.
Baldeosingh said that Guyana should therefore make every effort to maximize the benefits to be derived from being an oil producing country in short term since no one knows exactly how long the window of opportunity will be there.
Baldeosingh said that in order for Guyana to maximize the benefits, it needs to be adequately prepared.
The former Petrotrin Chairman said that everyone can rest assured that ExxonMobil and its partners are well poised to begin oil production come 2020. He said that the company would have already put everything in place.
Indeed, there is nothing standing in ExxonMobil’s way. The oil giant has already received all relevant permission from the Government of Guyana. In fact, ExxonMobil’s Operations Manager, Doug McGehee had announced that data for Phase-two of the Liza development project is already being analyze. So even before production for Phase-one begins plans for Phase-two is already in process. This is clear indication that ExxonMobil has, in local parlance, all its ducks in a row.

BUT WHERE IS GUYANA?
Baldeosingh, who has actual experience working in the oil industry, said that Guyana has a long way to go in its preparation.
“Guyana has to do a lot of work to be ready from an administrative and fiscal standpoint. There are many polices that are needed to be in place.”
Baldeosingh continued, “There is indeed a lot of work to be done in a short space of time. To be ready in two to three years’ time is a monumental task. It is almost a blessing that it is happening offshore.”
Some of the things that Baldeosingh pointed to that need to be done include the educating of locals who can make meaningful contributions to the industry; the setting up of a national oil company and the setting up of a Sovereign Wealth Fund (SWF).
Baldeosingh said that the setting up of an SWF is one of the best things that the government can do for Guyana. Indeed, Trinidad’s heritage and stabilization fund has worked as a saviour.
Baldeosingh said that other policies like the Local Content Policy need to be put in place. Guyana’s Local Content Policy is still in draft. Many have gone on record speaking about the weaknesses of this draft policy including Attorney-at-Law, Christopher Ram.
In addition to the areas highlighted by Baldeosingh, there are indeed many other issues that Guyana needs to address in preparation for oil.
The Environmental Protection Agency (EPA) needs to be strengthened. This newspaper already reported that the EPA approved an Environment Impact Assessment (EIA) submitted by ExxonMobil which environmentalists say leaves much to be desired.
The Guyana Revenue Authority (GRA) also needs to be enhanced. GRA announced that it is currently working on establishing an oil and gas unit. However, it is not clear if the officers manning that unit will be able to function at best in consideration of the fact that only the Commissioner-General of GRA, Godfrey Statia has access to the contact. GRA has since said that the officers will be made aware of the contents of the contract on a need to know basis.
Then there is the Petroleum Commission Bill which has been tabled in the National Assembly. There have been widespread objections to the content of that Bill.
Further, Guyana is a far way from becoming a member of the Extractive Industries Transparency Initiative (EITI). In fact, Guyana has only recently submitted an application to gain membership to the transparency body. That application will be considered in October.