Jagdeo calls for clarity on framework for future oil deals, other petroleum issues

Sep 10, 2018 ExxonMobil, News

By Kiana Wilburg

In light of the controversy surrounding the ExxonMobil contract, the Government has promised that future contracts will not bear the same terms. But it is three years down the road to oil and citizens are in the dark about the framework for future deals.
According to Opposition Leader, Bharrat Jagdeo, this will have serious repercussions on the business environment.
He expressed these and other sentiments yesterday at the opening ceremony of the laydown yard that was leased by Mohamed Enterprise to Falcon Logistics. The laydown yard is located at Area MM Mc Doom. It will become a holding facility for pipes and other important equipment to be used by ExxonMobil.

Opposition Leader, Bharrat Jagdeo

In the absence of a framework, Jagdeo said that the Government is allowing uncertainty to infiltrate the investment climate.
“Lack of clarity will not only affect investments here but people who are coming in to negotiate new deals. People are crying out for that clarity because they are unsure about what future negotiations will look like.”
The former Head of State also lamented the lack of clarity on other crucial oil and gas issues. In this regard, he said that the nation is unaware of the terms of reference for the Government’s newly established Department of Energy. He questioned whether this would be in conflict with the Petroleum Commission that is supposed to be established.
“We need to know if the terms of reference for the Department and if it will overlap those functions stated in the draft bill for the Petroleum Commission. Would one agency look at policy alone while the other carries out technical engagements with oil and gas dealers? Or would the Energy Department also have an operational role? We need clarity.”
The Opposition Leader said that the government has to make known, its position on being co-owners in shore base operations. Based on information he has received, Jagdeo said that he is aware that the government is preparing to invest in shore base facilities in Berbice.
Turning his attention to the issue of the Natural Resource Fund, Jagdeo said that the government has to make clear what percentage of the oil money will go towards savings for future generations and what part will go towards investing in other sectors.
“As for the Local Content Legislation, we need clarity on this as well. How soon will we see the policy and or legislation? What will be the nature of it? How much premium will it give to investments and how will it define Guyanese investments?”
The former President also wants the government to provide details on whether it will pursue competitive bidding for the future oil blocks or continue with one-on-one negotiations.
He added, “When it comes to taxes, there seems to be confusion. Everyday, there seems to be some new interpretation of what is in the tax laws and if we don’t have clarity about that then you create a very unsettling environment for investors because they will think the Guyana Revenue Authority (GRA) can act capriciously.”
Given these issues, the Opposition Leader said there is a serious need for the government to provide answers, or else they will continue to appear incompetent.

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