…eyes reducing energy cost by 50 per cent
WITH approximately US$94M already in Guyana’s Natural Resources Fund (NRF) and billions more expected with the continuous production of oil and gas, the People’s Progressive Party/Civic (CIVIC) Government will move to establish a Petroleum Commission to allow for the effective management of Guyana’s Oil and Gas Industry.
“We will also establish a Petroleum Commission to ensure that the oil and gas sector is not subjected to undue political interference. [But] more importantly, we will ensure that every cent of the revenues from the sector is accounted for, as well as every cent of it that is spent,” President Irfaan Ali said during his inauguration ceremony held Saturday at the National Cultural Centre.
During the last Parliament, a Petroleum Commission Bill was laid by the A Partnership for National Unity + Alliance For Change (APNU+AFC) Government, however, it was subsequently sent to the Special Select Committee. The new Minister of Natural Resources, Vickram Bharrat has indicated that a new Petroleum Commission Bill will have to be laid.
In 2019, a Natural Resource Fund Act came into effect to complement the Petroleum Act, which regulates the importation, sale and storage of petroleum; the Petroleum (Exploration and Production) Act, which deals with the regulation for prospecting of and Production of Petroleum and Licensing (PPL) and the Petroleum (Production) Act, which vests in the state the property in petroleum and natural gas within the country.
Notwithstanding the global COVID-19 pandemic, which has brought industries across the world to a halt, Guyana’s economy, according to the World Bank, is expected to grow 52.8% this year – surpassing all 26 Latin American and Caribbean states. This exponential growth is directly linked to the budding Oil and Gas Industry. To date, U.S oil giant ExxonMobil has discovered more than 8 Billion barrels of recoverable petroleum resources in the Stabroek Block.
“We are conscious that the proceeds of this bounty must be managed in a transparent way that will assure the people of Guyana that they will be the beneficiaries in a fair and equitable manner. That is why my Government will establish the legal and regulatory foundation upon which a new and modern economy will be built, striking a vital balance between our traditional sectors and the new and emerging industries, including oil and gas, technology and communication,” President Ali said.
He noted that his Government’s legislative agenda will create a regulatory framework to enhance sustainable productivity, but with a human face and in an environmentally friendly atmosphere. “To stimulate business enterprises, we will reduce the cost of energy by 50 percent through a mix of hydro, gas, solar, and wind, adding more than 400 megawatts of newly installed capacity over the next five years. High transportation cost will also be tackled through investments in a deep- water harbour, the Linden to Lethem Road, a high-span bridge across the Demerara River, and other transformational infrastructure projects,” he further announced.
The high cost associate with energy has always been a major concern for Guyana’s Private Sector, particularly for manufacturers. Both the PPP/C, during its 23 years in office – 1992-2015, and the APNU+AFC (2015-2020) Governments had committed to producing cheap and reliable sources of energy. Back in power, the PPP/C is indicating that the high cost of electricity will be brought down this time around. Additionally, a Single-Window Clearance System will be created to reduce bureaucracy and the cost of doing business. In the short term, President Ali said his Government will provide support to the Private Sector to stimulate a resumption of their economic activities, especially putting back to work people who have been dislodged because of the COVID-19 pandemic.
