President Dr. Mohamed Irfaan Ali told Harvard Business School academics on Monday that the PPP Government’s reform agenda for the regulatory framework of the petroleum sector, is meant to ensure transparency and accountability as its guiding principles.
He made the comment during his address to the institution’s virtual faculty workshop on the microeconomics of competitiveness.
Much of his presentation focused on the Government’s efforts to make Guyana a competitive investment destination while providing conditions that guarantee a high standard of living for the Guyanese people.
Dr. Ali explained that the oil and gas sector will serve as a powerful mechanism to deliver these benefits. To this end, he said the PPP/C Government is implementing some key initiatives to properly manage the sector.
“We are in the process of tabling a lot of these before the National Assembly – a draft local content policy and Bill, establishment of a natural resource fund, building local content for auditing, revising fiscal management of the petroleum sector,” the President said.
The Government will soon table local content legislation in the National Assembly, after just a year in office, which will carve out quotas for Guyanese in the oil and gas sector.
The Government has had to fast-track this drafting process, after Guyana went six years post-oil discovery without local content legislation. Similarly, the Government will be revamping the natural resource fund, which was passed under the previous administration in the period following the passing of the December 21, 2018 Confidence Motion.
The wealth fund legislation currently in place has been flagged by several senior Ministers of Government as problematic.
The President said, “These are the important areas to ensure that the sector is competitive and more importantly, the sector brings competitive opportunities for the local private sector.”
He added, “I’m just demonstrating to you, the multifaceted nature of Guyana’s economy and the pace at which things are moving, and that pace requires the institutions of the state to also change rapidly and to modernise.”
He told the workshop that the rate of exploration success is roughly 80 per cent, with 26 per cent commercial discoveries. The discoveries, Dr. Ali related, are highly resilient with ExxonMobil reporting world-class breakeven prices of US$35 per barrel and lower with incoming projects.
The President reiterated ExxonMobil’s ambitious development plan and noted that production levels are projected to meet one million barrels of oil per day, well before 2030.
The Government intends to use the proceeds from the sale of its lifts to invest in world-class education, healthcare, and infrastructure, among other features of a diverse and resilient developed economy.