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UNFULFILLED MANIFESTO PROMISE: Guyana to close 2023 without independent oversight body for oil sector
Kaieteur News – Guyana is witnessing a rapid escalation in its oil production capabilities, having achieved a milestone of 500,000 barrels per day (bpd) in November. Despite this rapid growth in oil production, the Peoples Progressive Party/Civic (PPP/C) government has not yet fulfilled its promise to establish a Petroleum Commission, an independent body envisioned for overseeing the sector. This promise, articulated in the government’s manifesto, aimed to institute the Commission shortly after taking office in August 2020. However, three years into its tenure, the government has not provided a timeline for this critical establishment. The delay in instituting the Petroleum Commission foments uncertainty where the government claims there is prudent management of the booming oil sector, as this body is meant to protect the industry from political control and influence.
The significant increase in production is primarily attributed to the commencement of operations by the Prosperity floating production, storage, and offloading (FPSO) vessel. Prosperity, of the Payara project, joined the Liza Destiny and Liza Unity FPSOs, enhancing the nation’s oil output. While Prosperity is currently producing 100,000 bpd, it is anticipated to reach a full capacity of 220,000 bpd. Alongside this, the Liza Destiny and Unity FPSOs are contributing with 150,000 bpd and 250,000 bpd, respectively. With these developments, total production offshore Guyana, driven by ExxonMobil as the Stabroek Block operator, is expected to surge to 620,000 bpd early next year.
Map showing the Stabroek Block offshore Guyana
The increase of Guyana’s oil production is occurring at a breakneck pace. The Yellowtail, Uaru and Whiptail projects are expected in 2025, 2026 and 2027, taking production to 1.2 million bpd.
Addressing the delay in establishing the commission during a press conference last July, President Dr Irfaan Ali explained that establishing the Commission requires complexity and a comprehensive bill that takes into account various stakeholders and national interests. When asked about whether the administration sees the need for a strong hand by the government in the oil sector, President Ali denied that there is any such intention on the PPP/C regime’s part. He explained that the government’s role is that of a facilitator rather than a direct participant in business.
Contrastingly, Vice President Dr. Bharrat Jagdeo has often downplayed the need for a Petroleum Commission, pointing to examples of corruption in countries with similar oversight bodies. This overlooks the administration’s own commitment to establishing the Commission as part of its electoral promises in 2020. The government’s reluctance to commit to a timeline for the Commission’s establishment, coupled with its avoidance of direct responses on the matter, casts doubt on the fulfillment of this promise.
An analysis by Kaieteur News suggests that the Petroleum Activities Act, put in place just months ago, significantly increases political influence in the oil sector. This development, combined with the government’s continued delay in establishing the Petroleum Commission, implies that the promise of an independent oversight body might remain unfulfilled. As Guyana’s oil production continues to grow swiftly, stakeholders believe the country – now more than ever – needs balanced and transparent governance to ensure the sector’s sustainable development.
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