Regardless of who is in office, demand transparency for oil sector - Experts urge Guyanese

Regardless of who is in office, demand transparency for oil sector – Experts urge Guyanese

Aug 06, 2020 News

Now that the PPP Government is in place, one of the key matters it will be hurrying to address relates to the country’s ill-preparedness to handle the oil industry. As it advances efforts in this

Arthur Deakin, Analyst at Americas Market Intelligence

Dr. Remi Piet, a Senior Director at Americas Market Intelligence

regard, international industry experts are urging Guyanese to ensure that they demand transparency and a depoliticized regulatory process for the management of the oil and gas sector.
Specifically making this comment in an opinion piece sent to Kaieteur News were Dr. Remi Piet, a Senior Director at Americas Market Intelligence (AMI), and Arthur Deakin, an Analyst at AMI.
Both were keen to note that the decisions of the new government will play a fundamental role in how the abundant petrodollars are spent in creating either a resource-dependent or a resource-rich society. In this regard, the oil consultants noted that citizens must ensure policymakers are held accountable and that decisions are made based on the merit of applications—not in the interest of a political party or politician.
Even though the COVID-19 pandemic has unleashed unprecedented demand shocks throughout the industry, the experts noted that the Stabroek Block partners have the financial resources to weather the storm and have reiterated their long-term commitment to Guyana. On this note, Dr. Piet and Deakin opined that the government would be wise to ensure all parties meet at the table as partners and make certain that the forthcoming oil money is put to good use for the Guyanese people.
Dr. Piet and Deakin noted that a main objective should be to provide opportunities for the people of Guyana while diversifying the economy. They said that oil majors, in collaboration with the government, should continue to develop onshore infrastructure and create jobs for local citizens.
With respect to the latest swing of volatility in oil prices, Dr. Piet and Deakin said that this has put countries highly dependent on oil revenues, such as Ecuador and Venezuela, gasping for financial resources. The experts said that Guyana should avoid this at all costs and implement specific policies aimed at knowledge transfer and support to local entrepreneurship. With the correct policy frameworks, they asserted that the country can define a path away from the pitfalls of resource curse scenarios.
Further to this, the petroleum consultants were keen to note that the development of the energy sector is needed for Guyana but stated that it has to be harnessed as a vector of value creation.
In this regard, they said that revenues from oil will need to be channeled towards diversification both within the extractive sector and in the rest of economy. To complement this, they said that Guyana needs to embark on the strengthening of regulations in the energy and mining sectors, led by the presence of established actors. Dr. Piet and Deakin opined that this would lead to a pipeline of alternative energy projects and regulated mining operations.
More importantly, the experts stated that revenues from the extractive sector should serve to support private entrepreneurship and strengthen institutional and corporate governance. They believe that it could also help restructure the sugar industry, and agriculture as a whole, whose efficiency, standards and cost-effectiveness need to be improved.
Even as government pushes for Guyana’s authorities to ensure there is a move towards diversification, the experts stressed that this alone will not be sustained unless structural reforms are undertaken, institutions are strengthened and a strong regulatory framework is implemented. They said that this will not be done overnight but the path is clear for this to be accomplished. They concluded, “…Guyana has been dealt pocket aces; it is up to the next administration how they decide to play the remainder of their hand.”