Dec 27, 2019 News
In an effort to ensure there is transparency and accountability in Guyana’s oil sector, the Energy Department has announced that it will be taking steps to ensure citizens are able to access records on the sale of the nation’s oil.
According to the department, the records will explain how, when, and for how much the country’s crude oil is being sold. It also stated that it will be collaborating with the Guyana Extractive Industries Transparency Initiative Secretariat regarding the mechanisms to allow public access to this information.
On Tuesday, the department would have informed the nation that the first three lifts of Guyana’s oil from the Stabroek Block will be sold to Shell Western Supply and Trading Limited. This subsidiary of Shell, the third largest oil company in the world, is based in Barbados. The three lifts which are due in February 2020, will amount to three million barrels of Liza Crude.
Furthermore, the Energy Department’s decision to make details of the oil sales public would be in keeping with a key recommendation from the International Monetary Fund (IMF).
Kaieteur News would have reported last week that from 2015 to now, the IMF has played a key advisory role to the Government, particularly on oil-related matters and just recently, impressed upon the government, the need to carefully monitor every aspect of the process to sell Guyana’s oil, as significant revenue is at stake.
The IMF stressed that the sale of the Stabroek Block oil will require significant decisions to be made based on technical experience and expertise. But in all its dealings, the Fund categorically stated that all decisions and activities regarding the sale of Guyana’s oil must be “transparent” and “undertaken in the public’s interest.” Its advice in this regard was outlined in a special report prepared mere months ago.
In that document seen by this newspaper, the IMF’s Fiscal Affairs Department said that since the sale of crude could bring significant revenue, establishing an optimal selling price is key. It noted, however, that this requires professional expertise, careful understanding of the process, and oversight.
Expounding further, the Fund’s Department said that crude oil sales are made through a network of buyers who are known to the trader. The trader then reaches out to potential buyers whom they have identified and are familiar with.
The Fund was keen to note that the government must be vigilant and monitor as well as control the selection of buyers, terms of sale, and the transfer of revenues to ensure that those decisions and activities are transparent.
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