Govt has carefully utilised oil monies to benefit all Guyanese – VP Jagdeo

– praises Guyana’s management of its oil & gas sector as a “success story”

Describing Guyana’s management of its oil and gas sector as a “success story”, Vice President Bharrat Jagdeo has highlighted the fact that Guyana compares favourably against other countries around the world who have also had to navigate the potential pitfalls of their oil sectors.

At his recent press conference, Jagdeo pointed out that rather than the follies and failed investments other oil producers have plunged their oil money into, it is no secret where the People’s Progressive Party/Civic (PPP/C) Government has been spending oil funds… towards creating a sustainable economy.
“We have made great strides and unlike the infamous behaviour in many other parts of the world with oil and gas money, you didn’t find that here in Guyana can trace every cent you can see it going to things that are visible to the people of this country that will change their lives,” Jagdeo said.
“I don’t want to list the details, you will hear about this next week when the Minister speaks about [the] tissue culture labs opening up new sectors, bringing in better quality animals, giving greater incentives, co-investing in the agricultural sector and other sectors to expand the economic base of the country,” the Vice President added.
In addition to its wise stewardship of oil funds, the PPP/C Government has also made great strides when it comes to shoring up its regulatory system. According to Jagdeo, the PPP/C Government has made significant changes to the regulatory regime with new laws and policies, as well as a new and improved model Production Sharing Agreement (PSA).
“Many countries that have been producing oil and gas for 60 years, don’t have a local content policy. We have one and 1000 Guyanese companies are already benefiting from over $700 million in business. They didn’t see that as positive. They didn’t see now that you have to go to auction. So, if you really want to talk about what has happened in the five years since first oil it’s been an exciting period for us.”
“We have kept our commitment to a new PSA and effectively we have renegotiated the five contracts outside of this Stabroek contract because now the new PSA would apply to them. We have passed the local content law. All of these things have been done by this Government and we have utilised every cent of oil money in the areas that will benefit our people. This is a success story. It’s not infamy,” the Vice President further said.
There have been several key changes ushered in by the PPP/C Government when it comes to the oil and gas sector. They include the implementation of the Local Content Act and the amendments to the Natural Resource Fund Act.
The implementation of a model new PSA means that all future PSAs will include the retention of the 50-50 profit-sharing after cost recovery; the increase of the royalty from a mere two per cent to a fixed rate of 10 per cent; the imposition of a 10 per cent corporate tax; and the lowering of the cost recovery ceiling to 65 per cent from 75 per cent.
In Region Three, the transformative Gas-to-Energy (GtE) Project is being built which includes the construction of an integrated Natural Gas Liquids (NGL) Plant and a 300-megawatt (MW) combined cycle power plant in Wales. The project will be utilising natural gas from the country’s offshore operations in the Stabroek Block.
Meanwhile, Guyana’s Exclusive Economic Zone (EEZ), where oil production and exploration are ongoing by international companies, has been the source of employment for thousands of Guyanese in the oil and gas sector… employment is currently estimated at 6,500.
As many as 454 persons were hired within the first half of the year in the oil and gas sector, already exceeding 50 per cent of the target set by the Local Content Secretariat (LCS) for oil and gas new hires for 2024.
However, most of the companies that are directly and indirectly supporting offshore operations are based in Georgetown and its environs.