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Lack of framework for Guyana's oil and gas sector is cause for concern -People's Progressive Party



By Kaieter News

Petroleumworld 05 10

The continued absence of a framework for the oil and gas sector is cause for concern, according to the People's Progressive Party (PPP).

The opposition concerns follow reports published in the Wednesday edition of the Kaieteur News that U.S oil giant ExxonMobil had bypassed several local companies by hiring Trinidadian firm, Ramps Logistics to provide logistical and customs brokerage services.

Opposition Leader Bharrat Jagdeo pointed out that there has been no movement on the generic issues such as the framework for the predictable oil sector that would include an independent Petroleum Commission, a Sovereign Wealth Fund, auctioning of future oil blocks and also Local Content Legislation.

“So that all the issues like we saw today [KN article] about the brokerage service given to a Trinidad company; those issues would have been resolved in the context of strong Local Content Legislation and also what package of incentives that anyone who invests in the oil sector will get and what they will not get. We need clarity on this,” Jagdeo stated.

He highlighted that if the framework was in place one could have highlighted that the company was operating outside of the framework established.

“Establishing the framework itself would have given great confidence,” Jagdeo stated.

Several persons from the local shipping industry, who spoke with Kaieteur News, all agreed that a Trinidadian firm being given the hog of the logistical work needed in the oil and gas industry is a “national insult” and a “slap in the face of local content”.

Jagdeo maintained that the PPP remains unhappy with Government's approach to the signing of the Petroleum Sharing Agreement (PSA) with the company, highlighting that they are provisions in the agreement that they are very unhappy with because they were departures from the 1999 agreement signed by former President Janet Jagan.

“As a political party we have made it clear that we are unhappy with the process. We are unhappy with the contract itself that was signed. Very unhappy, but I also have to make sure that as Leader of the Opposition and head of a political party that I don't get accused of contributing to a climate where we repudiate contracts once a legitimate Government has signed them,” Jagdeo noted.

He also stated that the Government has two approaches to the contract. It can repudiate the contract and enter into a contentious fight with ExxonMobil or agree at the level of Cabinet to approach ExxonMobil for renegotiations.

According to Jagdeo, the PPP favours the latter option.

“We have made it clear that ExxonMobil came out of these negotiations way ahead of Guyana by billions of dollars. We have to put pressure on Government to approach the company,” Jagdeo stated.

He expressed the view that the Government has made it clear that they don't want to renegotiate the contract although they have made excuses for the contract. Jagdeo stated that the Government should answer what changes they plan to make to the contract.

“If they could even answer to the Kaieteur News or anyone else because Kaieteur News has been at this for a while; if they could answer to you what they will change from ExxonMobil in future contracts,” Jagdeo stated.

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Story from Kaieter News
05 10 2018

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