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No touching oil money until sweeping reforms – President Ali
President Dr. Irfaan Ali does not intend to touch a cent from Guyana’s sovereign wealth fund until a series of reforms are enacted to strengthen the Government’s regulatory infrastructure for the oil and gas sector.
President Irfaan Ali
These reforms include revamping the Natural Resource Fund (NRF) Act, establishing a Petroleum Commission, and updating other legislation pertinent to the management of the oil and gas sector.
“All of these things have to be done institutionally before we even think about [accessing oil funds],” the President said.
He made this commitment in a recent interview with local journalists.
After the President took office on August 2, one of the major questions was how the new Government would manage Guyana’s oil and spend the oil money. The government had decided not to access the few hundred million dollars in oil money sitting in a New York Federal Reserve Bank to help with its emergency budget.
The Petroleum Commission, Ali has noted, is necessary to keep the management of the sector away from political influence. Vice President Bharrat Jagdeo said that the sector will instead be managed by the best technical minds.
As for the sovereign wealth fund, the administration has frowned on the Natural Resource Fund implemented by the former David Granger administration. It said that its provisions give the subject Minister too much control over the Fund. Attorney General Anil Nandlall has noted too that the legality of the Fund is questionable, given that it was passed after the Government fell by a December 21, 2018 vote of no Confidence.
The Government has to implement local content legislation too; the past government only formed a policy. This administration has already formed a local content advisory panel to assist with its efforts. Among its members are Trinidadian local content expert, Anthony Paul, and Head of the Guyana Manufacturing and Services Association (GMSA), Shyam Nokta. Nokta is the Chair of the panel. Multiple business service organizations have urged the government to cleave more to the recommendations made by the private sector, as it seeks to improve on the current policy. Suggestions are coming out of the Georgetown Chamber of Commerce and Industry (GCCI) that the panel be expanded to include more diverse private sector representation.
The Government is expected as well to update the Petroleum (Exploration and Production) Act, the Environmental Protection Act, the Procurement Act, and other laws which are pertinent to the management of the sector.
The President said that once the legislation and Fund are in place, the government will move to establish the Commission. Several of the campaign promises of the People’s Progressive Party Civic (PPP/C) hinge on the use of oil money, but it has not said when it will begin to access the Fund.
Meanwhile, the government continues to skirt calls for a renegotiation of the Stabroek Block agreement. Asked about this, the President only offered that he is reading the comments being made by various persons, and that he is “absorbing” what is being said about the government’s management of the sector.
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