Keep politics out of managing oil fund – US ambassador

-urges Private Sector to hold Govt accountable on managing oil wealth

By Jarryl Bryan

The Natural Resources Fund (NRF) must benefit current and future generations, and because oil is a non-renewable resource, United States Ambassador to Guyana, Sarah Ann-Lynch has urged that the fund be managed in a non-partisan, non-politicised way.
The US envoy made these observations during her keynote address at a Guyana Manufacturing and Services Association (GMSA) luncheon on Tuesday. According to Ann-Lynch, such funds must be managed based on a sound economic model and a balance between spending and saving.
“The fund must be non-partisan. It is for the good of all Guyanese, regardless of political persuasion, your hometown, your ethnicity. And it’s not just for today’s Guyanese, but your children, grandchildren and great-grandchildren.”
Ann-Lynch, therefore, noted that while the fund is a public entity, its success will depend heavily on the Private Sector’s participation and oversight. She noted that organisations like the GMSA can do things like advocating for regular public disclosure on how the fund is being used.
Such disclosures, the envoy explained, can include when and how much the fund is credited, as well as details about any withdrawals and investments. In addition, she noted that the group can continue to offer its insights during pre-budget discussions.
“This is not about politics. This is about economics. And you, as representatives of the Private Sector, must do your part to ensure that the decisions your organisations make are impartial, objective and free from political bias so that they remain focused on economics rather than politics. This will help keep the fund non-partisan.”
“You are not alone. This chamber and others like it throughout the country represents a vast array of citizens and taxpayers. Together, I encourage you to collaborate with other stakeholders to form a strategic plan to target job creation, investment and long-term revenue management,” Ann-Lynch said.

Oil funds
With first oil expected in a matter of months, Government had signed the Natural Resources Fund bill into law earlier this year. The bill sets out, among other things, a 22-member Public Accountability and Oversight Committee that will oversee the fund. The committee is supposed to include representatives from the media, Private Sector and the bar association.
Following its 10th discovery of oil in the Stabroek Block, ExxonMobil had estimated the recoverable resource in the block to be 5 billion oil-equivalent barrels. With oil at US$50 a barrel, that equates to well over US$200 billion.
Exxon has since revised this figure upwards after three more discoveries, the last one being at the Yellowtail-1 well in April. More drilling is also scheduled for this year and it was only days ago that its first Floating Production, Storage and Offloading (FPSO) vessel bound for Guyana, Liza Destiny was commissioned.
In addition, an independent assessment, or competent persons’ report, had found that 2.9 billion barrels of oil exist in the Orinduik Block. All of this will represent a monetary windfall for Guyana, which will be saved and invested through a Natural Resources Fund. Previously, a green paper on the fund was laid in the National Assembly.
Then there is the issue of the fund managers. Investment firm Merrill Lynch has previously expressed an interest in being involved in managing Guyana’s oil finances. In fact, representatives from the firm had reportedly met with Central Bank Governor, Dr Gobind Ganga.
The Opposition has urged that the vetting process for the fund manager be a rigorous one. Touching on this subject also on Tuesday, the US Ambassador recommended that should Guyana go this route, credible and efficient fund managers should be chosen for such a job.