PPP/C Govt. reduces information in latest oil report

Mar 11, 2021 News

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By Kemol King

Kaieteur News – The Ministry of Natural Resources sent out a release yesterday, announcing receipt of payment for Guyana’s fifth oil lift from production at the Exxon-operated Liza Phase One operation. Though this report gives some information on lifts dating back to the start of oil production, it is immediately noticeable that the report contains a vastly reduced account of information on oil production and revenues, when compared to a report from the Ministry of Finance under the previous administration.
This report comes after a month of advocacy by Kaieteur News for Vice President, Dr. Bharrat Jagdeo, to keep his commitment made during a February 9 press conference, to release reports on Guyana’s production.
The Ministry of Natural Resources said that it “recommits to transparency and accountability within the Petroleum Sector…”
The report concluded by saying, “The Government of Guyana through the Ministry of Natural Resources is committed to providing updates on oil lifts and sales as may be necessary to ensure all stakeholders and members of the public are informed.”
On the fifth lift, the Ministry stated, “On February 05, 2021, 997,420 barrels of oil were lifted from Liza Destiny with a value of US$61,090,968.03 with a grand total to date of 5,009,797 barrels of oil worth US$246,542,662. Inclusive of Royalties, the total in the Natural Resources Fund Account now stands at US$267,668,709.12.”
In addition to a singular table which provides basic figures on the laden date, volume of oil, and value of each of the five lifts, the aforementioned represents the entirety of this administration’s public disclosure on Guyana’s oil and revenues.
A photo attached to this article shows the singular page of information from Vickram Bharrat’s Ministry. This is accompanied by excerpts from a five-page document provided by the previous administration for January 2020, for comparison.
In stark contrast, the report envisioned by former Finance Minister, Winston Jordan, provided pages of detailed information on Guyana, with several tables.
Jordan’s report, titled Report on Petroleum Production and Revenues, included information on production, including all oil produced in that month, barrels used for facility fill, crude remaining in the hose and piping of cargo tanks and the crude offloading point that connects to the offloading vessel, whether changes are made to volume of ballast crude, whether there were operational losses or crude used for transportation. A table accompanies this information, which shows the mathematics to ensure the public knows where all its oil went.
Furthermore, Jordan’s report provided information on sales and entitlement, which includes a breakdown of government’s share and the contractors’ share, cost oil in relation to the cost ceiling, profit oil; with tabular and diagrammatic illustrations. Jordan’s report also reveals information on transfers to the Natural Resource Fund (NRF), including that of royalties. There is a diagram to illustrate.
Jordan’s report notes the need for the monthly oil reports to be produced, in addition to several other reports, for which the law mandates publication. It states “These reports will allow the public to monitor deposits in, and withdrawals from, the NRF so as to ensure that petroleum revenues are being managed according to the provisions of the NRF Act 2019. However, these reports may not contain sufficient information to allow one to determine how government revenues that are deposited into the NRF are calculated. As such, the Report on Petroleum Production and Revenues (RPPR) serves to bridge this gap by providing regular updates on petroleum production and revenues.

The regular publication of the RPPR will allow for greater transparency in this new sector of the economy, ensuring that the public is fully aware of the amount of petroleum being produced and revenues being generated. Such transparency is important, given the magnitude of revenues that will be generated from this resource.”
Though former Minister Jordan noted the legal requirement for these reports, many of these documents expected from 2020, before the David Granger administration was unseated, cannot be found. With this lack of information from both administrations, through 2020, the public is left to speculate about its oil revenues and production details, after the precedent for transparency set by Jordan at the start of oil production.

The People’s Progressive Party/Civic (PPP/C) administration intends to replace the Natural Resource Fund Act, and is looking for experts to revamp Guyana’s almost entirely outdated petroleum legal framework. However, there has been no amendment to the Act to move responsibility for publication of these reports from the Finance Ministry to the Natural Resources Ministry. Notably, the Act does not specify the extent of detail to be placed in these reports. However, not publishing the legally mandated monthly reports on the Finance Ministry’s website is a breach of the law.

 

 

 

 

 

 

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