Very usefull links


News links




Dow Jones

Oil price



Views and News





Guyana must decide on oil money, spend, save … absence of direction, rules can lead to chaos – Chatham House



By Kaieter News

Petroleumworld 05 16

Billions of dollars in oil money will soon be flowing Guyana's way. But if the local authorities do not decide soon, what percentage of it should be saved and what should be invested, then chaos would surely be the end result.

This salient piece of advice was passed on to Guyana by Chatham House. The London-based body has been assisting Guyana in getting fundamental systems and policies in order for the proper management of its looming oil resources.

In its meeting last year, Chatham House met with several of Guyana's officials.

The London-based body observed from those discussions that there was great uncertainty on the correct balance between consuming and saving petroleum revenues.

It said, “Some participants argued that most of it should be saved for future generations.

Others argued that significant amounts should also be used to increase public spending on priority areas like infrastructure and education.

This debate illustrates the need to be clear about fiscal rules and savings frameworks, as well as to explain the reasons for these rules regularly to the public.”

Chatham House stated too that in Timor-Leste and Nigeria, the respective Ministries of Finance chose to save a significant portion of its oil money.

It noted, however, that those agencies also explained every month to stakeholders, the importance of that fiscal rule and why they were not spending more.

Additionally, Chatham House delivered a presentation to local officials, that examined profits made from a large oilfield and the impact of spending those “volatile” revenues on a small economy.

Chatham House said that the negative impacts demonstrated the necessity to de-link these revenues from public spending.

The organization outlined that there are numerous fiscal rules that can be used to this end.

One of these rules it said, is to spend based on structural income rather than on the volatile actual income. Chatham House noted that structural income or permanent fiscal revenues can be determined by using the long-term average price for the commodity and save any revenues over that price.

It said that Governments can spend their savings when revenue flows fall below the long-term price.

There are different ways to estimate the long-term price and none is perfect, but they do give a structure to the savings decision.

Chatham House said, too, that Governments should also identify windfalls as transitory or permanent price surges, and remain conservative in making this assessment.

Hit your target - Advertise with Us

Story from Kaieter News
05 16 2018

We invite all our readers to share with us
their views and comments about this article.
Write to

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to:

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

November 13 - 15, 2018.

Gubkin University, Moscow
SPE Student Chapter











Editor & Publisher:Elio Ohep/
Contact Email:

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.