‘If elected, we will ask within 50 days for more royalty, ring-fencing’- PNC

Jun 04, 2023 News

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Kaieteur News – The People’s National Congress (PNC) has finally revealed its position on the oil and gas sector.

At its weekly press conference on Thursday, the party led by Mr. Aubrey Norton shared its plans for the industry, announcing that it will engage American oil major, ExxonMobil for more benefits for Guyana within its first 50 days in office.

“A new Coalition government will invite the company to the negotiation table within its first 50 days in government,” the party said.

Economic Advisor to the Opposition Leader, Elson Low told reporters that the party has noted the attacks in Kaieteur News on its position with regards to the development of the country’s oil sector and finds the “attacks” disingenuous since records would show that the Opposition has made significant statements on the subject.

This newspaper reported last week that the Opposition Leader said he will await general elections before revealing his plans for the petroleum sector.

The party noted, “We recognize and applaud the Kaieteur News for its passionate advocacy on oil matters. We however seriously differ from the newspaper in two major ways: (i) we answer to the people and therefore will not subscribe to any self-appointed judge’s standard or performance test as to the frequency, intensity, and content of our statements on oil; and (ii) we believe that, despite the significance of oil, other issues affecting our nation remain critical—issues such as poverty, high cost of living, high-level corruption, ethnic and political discrimination, biometrics and a clean voters list with the aim of having credible elections, and failed governance by the PPP.”

It said Kaieteur News was out to “provoke” the party but it will not be forced to adopt anyone’s position.

Low noted, “Like we said before we will be guided by the laws of Guyana which demand that we do everything to ensure our people benefit from the oil and gas sector.”

After insisting on keeping its plans for the oil sector silent until elections, the Opposition has decided to share some of its policies to govern the industry.

The Economic Advisor noted that the Opposition believes that revenue from the oil and gas resources belong to all Guyanese, as such “all must benefit equitably, systematically, and urgently”.

According to the party, “The current inflow of oil revenues is not a pittance. It has put Guyana among the richest countries in the world per capita.  We in the Opposition are therefore focused on ensuring the proper use of the existing money for the development of the people of Guyana. We are also interested in our country developing the human resource capability to ensure we can monitor, evaluate and manage the sector successfully.”

Low explained that Guyana can benefit from a greater share of the pie by amending or enforcing a number of aspects in the current agreement. These include: increasing royalty; introducing ring-fencing; reducing cost oil; amending the 50/50 profit share split; conducting timely and robust audits; enforcing the requirements for full liability coverage and a Parent Company Guarantee to ensure Guyana does not bear any financial burden for oil spills or other disasters.

He said, “To achieve these ends, we believe several mechanisms could be employed (including) amendments of the oil contract in keeping with the terms of the contract which provides for such amendment.”

To this end, the Opposition noted, “A new Coalition government will invite the company to the negotiation table within its first 50 days in government.”

To achieve greater benefits for the country, the PNC also believes that there should be stricter and timelier enforcement of existing conditions, such as audits of company accounts, insurance and liability guarantees, and conduct of feasibility studies.

Additionally, Low pointed out that provisions could be included in the Environmental Permits to further protect the country’s interest.

Further, “Phasing of new approvals to increase our share of the pie. On this matter, we stated at our Press Conference of 6th April that “we propose that Guyana needs to develop a strategy to phase the development of new projects in the Stabroek Block in a manner that allows us to increase our takings through higher profit oil. At the moment, the 50/50 split gets Guyana only 12.5% of oil revenues – a percentage that seems unlikely to budge under the ongoing oil rush. With five FPSOs already in operation or already approved, the country is now well-positioned to seek a larger cut of the pie.”

The party believes that the current 25 percent that is left after 75 percent is deducted by Exxon towards cost, should be increased to allow Guyana to benefit greater.

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