First Oil is months away, as ExxonMobil intends to start production on the Liza-1 project.
According to several critics and political commentators, Government is far from prepared to effectively manage the petroleum industry and to prevent value leakage.
Poor contract terms, inability to regulate, and lack of capacity to audit costs are just few of the issues that plague the Department of Energy and its partner public actors with responsibilities to the sector.
But Government is prioritising several institutional strengthening requirements of the oil sector in its preparations for budget 2020, according to the 2019 mid-year report, presented by Minister of Finance, Winston Jordan.
That process has two facets.
The first is capacity building for certain public institutions with regulatory roles in petroleum industry. In this regard, institutions such as the Guyana Revenue Authority, the Department of Energy and the Civil Defence Commission are expected to build their capacities for cost audits, the designing and negotiation of production sharing agreements, and oil spill management and preparation, among other areas.
The report noted that an inter-Ministerial Committee on Petroleum (IMTCoP) was established in 2007 to coordinate public sector actors that have a role to play. It is through IMTCoP that Governmnet has indentified more than 70 areas for strengthening, across nine institutions.
“The imperative is to ensure that Guyana’s institutions are sufficiently equipped so that resource extraction delivers the maximum allowable benefit to the country, while assuring the safety of the environment and citizenry.”
The second facet of Government’s plan is the strengthening of those institutions to utilize effectively the increased resources which will be available. Noting that there have been unremarkable outcomes in health and education, Government has linked the strengthening of institutions to the wellbeing of the population, specifically the public sector. It notes that increased allocations for drugs and medical supplies when procurement is inefficient, increased teacher wages without commensurate increases in education outcomes and a direct linkage to performance, and budgeting to expand national public infrastructure without a sufficient engineering corps and quality control, “are recipes for wastage of public funds”.
It intends to propose expansions of public services and programmes, to achieve the goals of Green State Development Strategy: Vision 2040.
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