Local Content Policy, Competitive Bidding, Contractual terms for future contracts; these are all issues for which the government is yet to provide clarity. In the absence of the administration’s position on these matters, confusion and uncertainty are infecting the business environment. In fact, the government is once again proving that it is not “fit and proper” to run this country.
Those and other sentiments were expressed earlier today by Opposition Leader, Bharrat Jagdeo. He was delivering remarks at the opening ceremony of the laydown yard that was leased by Mohamed Enterprise to Falcon Logistics. The laydown yard is located at Area MM Mcdoom. It will become a holding facility for pipes and other important equipment to be used by ExxonMobil.
During his presentation, Jagdeo said that he is not only unhappy but deeply concerned about the government’s approach to the oil and gas industry.
He reminded that the generous terms given to ExxonMobil in its contract with the APNU+AFC Government Guyana were the subject of much debate. Jagdeo also recalled that the Government promised that future contracts will not bear the same terms. He noted however that it is three years down the road to oil and the people of Guyana are not aware of the framework for future oil deals.
In the absence of a framework, Jagdeo reiterated that the Government is allowing uncertainty to infiltrate the investment climate.
The Opposition Leader said, “Lack of clarity will not only affect investments here but people who are coming in to negotiate new deals. People are crying out for that clarity because they are unsure about what future negotiations will look like.”
The former Head of State also lamented the lack of transparency on other crucial oil and gas issues. In this regard, he said that the nation is not acquainted with the terms of reference for the Government’s newly established Department of Energy. He questioned whether this would be in conflict with the Petroleum Commission that is supposed to be established.
“We need to know the terms of reference for the Department and if it will overlap those functions stated in the draft bill for the Petroleum Commission. Would one agency look at policy alone while the other carries out technical engagements with oil and gas dealers? Or would the energy department also have an operational role? We need clarity.”
The Opposition Leader said that the government has to make known, its position on being co-owners in shore base operations. Based on information he has received, Jagdeo said that he is aware that the government is preparing to invest in shore base facilities in Berbice.
Turning his attention to the issue of the Natural Resource Fund, Jagdeo said that the government needs to reveal what percentage of the oil money will go towards saving for future generations and what part will go towards investing in other sectors.
The Opposition Leader continued, “As for the Local Content Legislation, we need clarity on this as well. How soon will we see the policy and or legislation? What will be the nature of it? How much premium will it give to investments and how will it define Guyanese investments?”
The former President also wants the government to provide details on whether it will pursue competitive bidding for the future oil blocks or continue with one-on-one negotiations.
He added, “When it comes to taxes, there seems to be confusion. Every day there seems to be some new interpretation of what is in the tax laws and if we don’t have clarity about that then you create a very unsettling environment for investors because they will think the Guyana Revenue Authority (GRA) can act capriciously.”
Given the aforementioned, the Opposition Leader said there is a serious need for the government to provide answers least it continues to appear incompetent.
Even though Business Minister, Dominic Gaskin was present at the event, the politician did not make any attempt to address the concerns raised by Jagdeo.