Harmon to control new Energy Dept

…Govt downplays yanking energy portfolios from Patterson, Trotman

Cabinet has officially approved the creation of an Energy Department that would now oversee Guyana’s oil and gas sector. Minister of State, Joseph Harmon, has been designated the holder of ministerial responsibility for this department.
This announcement was made during a post-Cabinet press briefing which Harmon himself hosted on Friday. In that briefing, he disclosed that the matter had engaged Cabinet’s attention, and its deliberations were centred on “organisational structure of the department, legislation to be introduced for the sector, negotiation with potential investors, exploration and production licences, public communication, responsibilities, the engagement of technical experts, the establishment of a Natural Resource Fund, capacity-building measures, (and) review of fiscal contractual terms.”
Responding to questions, Harmon assured that energy-related responsibilities lying with Public Infrastructure Minister David Patterson would remain untouched for now. Those include responsibility for the Guyana Power and Light (GPL).
“Those responsibilities with the Minister of Public Infrastructure will remain there for the time being. The Department of Energy initially will be dealing with oil and gas. Ultimately, (the) Department of Energy will basically deal with all matters in relation to energy.
“But as it stands right now, those matters which relate to the Minister of Public Infrastructure will remain (with that minister), and this department will deal with oil and gas. This is the specific responsibility of this department right now.”
Harmon noted that ‘a department’ would be less likely to lead to more bureaucracy than creating an Energy Ministry. Asked who would head the department, Harmon noted that while someone has not yet been identified, he will have ultimate responsibility for the unit before the National Assembly.

Stripped
Following a proposal he made, Government had announced its intention last month to strip Natural Resources Minister Raphael Trotman of responsibility for the sector.
The announcement that Trotman was being stripped of his responsibilities for oil was made in a taped interview with the Department of Public Information, in which he said, “Government will, in the coming months, establish the Department of Energy which will be housed in the Ministry of the Presidency.”
Trotman said also that the department will be “focused only on the development of the petroleum sector,” based on a proposal that he had made to President David Granger last year.

Incidentally, both David Patterson and Raphael Trotman belong to the Alliance for Change (AFC) faction of the coalition administration.
Trotman, and indeed the Government, has received much criticism for the way the budding oil sector is being handled. There have, in the past, even been calls to have Trotman removed from his position as Minister, especially when it was discovered that Government had stashed in a private account in the Central Bank US$18 million it had received from ExxonMobil as a signing bonus.
Though this discovery was made since last year, the Government has made no attempt to have the money placed into the Consolidated Fund. Many have argued that Article 216 of the Guyana Constitution dictates that all public revenue be placed in the Consolidated Fund, with the exception being where a specific law allows for the money to be placed in a special account.
Trotman was also criticised for his handling of the oil contracts between Government and ExxonMobil. Even the Government’s own adviser on petroleum, Dr Jan Mangal, has been skeptical of Guyana’s two per cent royalty on earnings from oil sales, which he said is low compared to global standards.
While Dr Mangal has not objected to the 50 per cent profit share Guyana will receive, he does believe that the generous tax concessions and two per cent royalty is nothing to boast about.
Others have also come out criticizing Trotman, including outspoken political commentator and Chartered Accountant Christopher Ram, who believes that Trotman’s handling of the oil sector could lead to future disaster.