Depletion policy will be made public at “some point in time”- VP Jagdeo

May 31, 2025 News

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Kaieteur News- Vice President, Bharrat Jagdeo has promised to make public the depletion policy governing Guyana’s oil and gas sector at some “point in time.”

At his weekly press conference on Thursday, Kaieteur News asked Jagdeo when will the policy be made available. He said the policy will be posted to the Ministry of Natural Resources’ website, the same site where the audit reports can be found.

Deviating from the question, Jagdeo spoke about the two audits that have been available on the website for months now. “Kaieteur News has been saying, oh the government is hiding the audits. We put them there…nothing you all probably didn’t even read them.”

Returning to the question, he said “the depletion policy could be put there too at some point in time… we are not rushing now to satisfy Kaieteur News.”

He said when government releases documents, they are not being read.

According to Jagdeo, the key element at this stage of the policy is to get as much oil out of the ground as quickly as possible, taking into consideration what could happen in the future in light of climate change.

“If you approach a rate where it becomes where the oil prices are close to the cost of production or the break-even point, obviously you have to sit down with your company, and thirdly we took the approach that which is recognised now in situations where the government is not a shareholder like Suriname,” he explained.

Jagdeo said Suriname has become a shareholder, because it is investing in their oil and gas projects. However, this is a risk because money has to be raised and taxpayers’ money is involved. Therefore, in that type of situation, one has to practice an aggressive proactive depletion policy.

Last Thursday, Jagdeo told the media that the country’s depletion policy was crafted to suit the global supply and demand and that long-term policies are not determined by day-to-day changes.

Kaieteur News had asked the vice president whether the government was considering putting a depletion policy in place to existing frameworks to manage and strengthen the oil sector, thereby ensuring maximum benefits for citizens.

“Should we have a depletion policy now… you don’t determine policies of a long-term nature on the basis of daily occurrences in an oil and gas market which is known for its volatility, and so when I saw that comment coming from Jordan [Winston Jordon- former Finance Minister], I wonder if he really understood policy,” Jagdeo said.

Former Minister of Finance Winston Jordan in a May 5, 2025 article captioned, ‘Govt. should hedge, implement depletion policy in face of dropping oil prices – Jordan’ published in the Stabroek News said that with unpredictable oil prices and the International Monetary Fund’s (IMF) projections of lowering prices for crude this year, the government’s ‘drill baby drill’ policy is flawed and a depletion strategy is needed.

In the article, Jordan opined that it is not too late to implement a depletion policy. “The more FPSOs [Floating Production and Storage and Offloading vessels] ExxonMobil brings on, it is with these additional costs,” Jordan told Stabroek News.

The opposition also weighed in on the matter on Friday, the Alliance For Change (AFC) challenged the government to make the policy public.

On May 26, this publication reported that Spokesperson for the AFC on oil and gas Dr. Vincent Adams calling Jagdeo’s bluff, issued the challenge to release the policy, so that it could be perused by the opposition and citizens alike.

“Well, I have never seen a (depletion) policy from this administration. So, what Bharrat Jagdeo needs to do is publish his policy. Maybe I don’t know if you’ve seen it, but I have never seen a policy besides (him) talking stuff. What is that policy?” he questioned.

Dr. Adams said such a policy is born from long-term planning, based on the production profile over the years, which is available in the Field Development Plans (FDP). The government would have to look at their strategic plan in the projects they were looking to undertake, and compare to see if it matches what is in the FDPs.

“Then you can devise a policy from that, if you want to not produce at the maximum level, then you can regulate how much oil you want to produce, etcetera. But… first of all, they have not released the FDPs, and I’m glad you asked that question,” he said.

The People’s National Congress Reform (PNCR) on the other hand saying that while it sees no need for such a policy, the oil revenues need to be managed better to secure future generations.

On May 29, this publication reported that, in an invited comment by this publication Economist and Spokesperson on Oil and Gas for the party, Elson Low said that a Depletion Policy cannot succeed, if the funds from oil which are placed in the Natural Resource Fund (NRF) continue to be spent in an irresponsible manner.

Stating his party’s position on the implementation of such a policy, he told the Kaieteur News, “we have long said that it’s important, that any government should conduct feasibility studies for each project to understand its implications for our economy. This will naturally mean that the depletion rate of our fields will have to be assessed.”

He explained that what the PNCR sees as more important is not the depletion rate, but the safeguarding of the resources. Therefore, a more disciplined and thoughtful approach must be taken with the NRF, rather than frequent amendments to the act to withdraw larger amounts, citing that the most recent amendment allows almost 100% of funds to be withdrawn.

Low’s argument is that, “Without a robust NRF, even a slower depletion rate would still jeopardize future generations, so safeguarding our sovereign wealth fund must be the priority. Similarly, even if we have a faster depletion rate, but also a strong NRF, intergenerational equity through savings would be preserved.”

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• AFC, depletion policy, Jgadeo, oil sector, PNCR

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