Transparent system must be set up before accessing NRF – President Ali

Oil payments

…negotiations ongoing with ExxonMobil on Payara – Jagdeo

While Guyana has needs, a transparent framework must be set up, inclusive of establishing a Petroleum Commission, so that the Government can access the billions of Guyana dollars sitting in the Natural Resource Fund (NRF) in the United States (US) Federal Reserve bank.

This was according to President Dr Irfaan Ali, speaking at a press conference on Monday. When asked if the Government will seek to access the funds when Parliament meets, he made it clear that the issue of transparency and accountability is of paramount importance when dealing with the Natural Resource Fund.
“Of course, the country has needs. The country is going through its own crisis with the COVID pandemic. We have a transformational set of investments that need to be made now, to create opportunities for the future, that would require us reaching into as much resources as we can,” Ali said.
“But importantly, is also the issue of transparency and accountability. Ensuring that the systems and institutions are in place before we utilise any resources. So that our country and our people can understand and it is done in an open and transparent way and there’s no secrecy behind the use of any resources. So those are the things we’re putting in place now.”

Ali cited the recently established local content panel, which contains eminent experts in the field of oil and gas, local content and labour relations. He also noted the need for establishing the Petroleum Commission, which languished on the order paper of the 11th Parliament for some time.
“We’re building up the mechanisms, the institutions, building up the framework, the rules. We have to get the (Petroleum Commission) in place. We’ve just put in place the advisory body on local content. We have to have an advisory body in terms of the review in various areas. These are all things that must be put in place and setting up the institutions,” he added.

So far, Guyana has received three cargo lift payments and two royalty payments, all deposited in the NRF. This means approximately US$150 million has been deposited in the Fund, plus interest.
However, this money has remained untouched, as the protracted political crisis that followed elections sabotaged any attempt to set up a system for withdrawing funds. The Natural Resource Fund Act stipulates that various committees must be established to provide oversight for the Fund. It is expected that this legislation will be reviewed by the current Government.

Payara
When it comes to approval for the Payara project, Vice President Bharrat Jagdeo, who accompanied Ali at the press conference, noted that the Government does not wish to telegraph its position during the negotiations with Exxon.
That being said, Jagdeo acknowledged that the Government and Exxon do not see eye to eye on various aspects of the Payara license and as such, this must be ironed out. Prominent in their disagreement are the prevailing environmental issues.
“Let me just say we don’t favour flaring. We’re opposed to flaring. Secondly, we believe that any water discharge, whether reinjected or discharged, must be treated to international standards,” Jagdeo told the media.
“We see this as a continuum, Exxon is not going to disappear tomorrow. The Payara license is not the only opportunity we have to get what the President said we wanted and what the PPP campaigned on, which is an industry which benefits the investor and significantly benefits the people, through jobs, business opportunities and so on.”
Jagdeo also reminded that the negotiations with Exxon are not one-off but rather, an ongoing process. He noted that there will be several opportunities over the course of negotiations to press Guyana’s case.
“There are numerous opportunities in this continuum. This is not a one event activity, where Payara will determine all our opportunities. There will be one when we come to talk about local content, when we talk about gas and development of our gas fields,” Jagdeo explained.
Exxon has for some time been engaged in flaring excess gas in the Stabroek Block, an exercise that caused environmentalists to be up in arms since this is generally viewed as harmful to the environment.
The issue of flaring, as well as the dumping of processed water back into the ocean, are some of the environmental issues that have held up discussions on granting approval for the Payara project.
The Payara development plan includes a Floating Production, Storage and Offloading (FPSO) vessel, named Prosperity. It is expected to produce 220,000 barrels per day, supporting up to 45 wells, including production, water injection and gas injection wells. (G3)