World Bank to help Guyana audit PSAs, analyse estimates of oil resources

Dec 30, 2019 News

The World Bank, one of Guyana’s crucial development partners, will be providing support for the oil and gas sector, specifically as it relates to cost audits of Production Sharing Agreements (PSAs).
The Bank will also provide independent third-party technical expertise needed to analyse the estimates of Guyana’s oil and gas resources.
This is according to the loan agreement for the US$20M Guyana Petroleum Resources Governance and Management Project. It was signed between the Bank and the Granger administration some months ago.
The loan agreement notes that the World Bank will provide support for Guyana to assess and conduct economic and fiscal modeling.
This should allow the authorities to forecast oil and gas revenues. The financial institution will also support Guyana in the areas of revenue administration and taxation, and evaluate options for future modifications to the nation’s oil and gas fiscal regime.
Legal support would reportedly also be made available. In this regard, the agreement outlines that assistance would be provided to enable Guyana to address upstream legal issues associated with the oversight of the oil and gas resources.
The World Bank noted that it understands how critical this support will be to Guyana, which lacks such technical capabilities at key institutions.
Some US$4.5M will be used to address some of these gaps through the direct engagement of external expertise.
The agencies, which stand to benefit from this support include the Department of Energy, the Guyana Geology and Mines Commission, the Ministry of Finance, the Guyana Revenue Authority and the Petroleum Commission once established.
The financial institution was keen to note that based on its experience from other projects, this type of capacity building is most effective when it is based on tangible on-the-job training and a learning by doing approach.
The Bank said therefore that oil and gas experts will be hired as advisors to provide general technical opinions, commercial advice, policy analysis, review of key documents, and other contributions, but more importantly, to deliver on-the-job training and peer mentoring, working closely with the government staff to transfer knowledge and build long-term capacity to manage the oil and gas sector.

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