Govt confirms plans to set up national oil company

By Jarryl Bryan

After much advice and urging from oil and gas experts, Government has confirmed its intention to set up a national oil company of its own in the near future to act in accordance with the burgeoning sector.
This was confirmed by Natural Resources Minister Raphael Trotman on Friday in the National Assembly. The Minister was at the time making an appearance before the Natural Resources Committee.

According to Trotman, the company will be one Guyanese may be able to buy shares in, through the issuance of shares. This will enable them to benefit directly from the oil and gas sector. Trotman also indicated that those with the means may even be able to bid and have part of a concession.
“The idea is that the company will be able to issue shares as Banks DIH, etc so ordinary Guyanese can access and those who have the means to go beyond would be able to bid and have a part of a concession,” Trotman explained.
Countries getting into the business of oil and gas are nothing new, experts recommended. In neighbouring Brazil, Petrobras is a well-known example of a State-owned oil company.
Venezuela also has its own State-owned oil company, Petroleos de Venezuela (PDVSA). There is also the Petroleum Company of Trinidad and Tobago Limited (PETROTRIN). These companies usually have billions of dollars in assets and have been known to operate like a bank, lending monies to other states.
The Finance Ministry’s recent Public Debt Annual Report had showed that since 2015, there has been a 4.1 per cent rise in Guyana’s indebtedness to International lenders. A breakdown of the figures shows that total external debt amounted to $240 billion, a 72.6 per cent bite out of the total public debt. On the other hand, domestic debt stood at $90.6 billion, or 27.4 per cent of the total.
The report notes that Guyana’s four main external creditors are the Inter-American Development Bank (IDB), the Caribbean Development Bank (CDB), the State-owned Export-Import Bank of China (China EXIM Bank) and lastly, the Venezuela State-owned oil company (PDVSA).
Following his bout with the Committee, Trotman was asked what structure this prospective oil company would take. He noted that in addition to the different models, Government has been the recipient of differing advice.
“We’ve received advice saying yes, some no, but I believe we are going to get an oil company. There are different models. I’m not in a position to determine now how exactly it will be (structured),” Trotman said.
According to reports, Chatham House, the Royal Institute of International Affairs, is lending support to the Government in this area. The entity is known for providing advice to emerging economies and has already given the Government of Guyana much advice on local content.