The Stabroek Block Production Sharing Agreement (PSA) has been heavily criticised over the years for the its fiscal weaknesses such as the absence of ringfencing provisions and low government take, thereby leaving many observers to deem it as unfair for Guyana.
Chatham House Associate Fellow, Dr. Valerie Marcel, says that indeed there are a number of opinions out there on the deal, some of which say it is unfair while others say that it is in line with industry standards for frontier countries.
Be that as it may, the Petroleum Governance Expert told Kaieteur Radio on its programme, Guyana’s Oil and You that she may be no fiscal expert but the deal is “confining” for Guyana. Expounding on this note, Dr. Marcel said that one of the issues is that if government wants to set rules, laws and policies like those for local content, then it would have to work within certain parameters.
“…As you start to produce, you need to put to paper, the rules by which the operator has to work and the contract is very confining, in the sense that it prevents Guyana from developing a local content policy that would have any implications on the commercial terms of the contract and a variety of things like that,” the Chatham House Associate Fellow said.
She said it is important at this stage for the government to set the regulations for oversight of the environment, oil metering, valuation of the crude and local content “and be able to do so in the interest of Guyana and not to be hamstrung by that contract.”
Dr. Marcel said she is not sure how Guyana can resolve the foregoing but she stressed nonetheless that there needs to be a focus now on how one administers the contract and implement it in a way that protects the interest of the country.
Apr 06, 2020By Zaheer Mohamed Port Kaituma Football Foundation (PKFF) is one of the leading sports organisations in Region One. The body was formed in 2009 with the aim of developing sports in the area. Its...
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