The newly established Guyana Oil and Gas Association (GOGA) on Tuesday evening used the occasion of its launch at the Marriott Hotel to call for “transparent governance” of the sector and to caution against Guyana going the way of other oil-producing countries.
In what was a call for prudent disbursement and accountability in the management of financial resources derived from the sector, Attorney Nigel Hughes, a director of GOGA, outlined the interests of the newly formed association. He also mirrored one of the critical themes of public discourse on the future of the sector ever since Exxon made public what it described as a “world class” oil find in the Liza 1 field, some 120 miles offshore Guyana. Describing the oil find as a “game changer,” Hughes declared that “a national discussion on what types of sovereign wealth funds are best suited for our republic is long overdue.”
Hughes said the multifaceted interests of GOGA will include ensuring “the establishment of robust and respected institutions and a strong regulatory framework for the sector,” as well as “protection and enhancement of the natural environment” and “sustainable investment in social capital.” Beyond those objectives he identified the creation of “competitive and sustainable local energy companies” as being among GOGA’s “primary interests.”
Last year’s disclosure of an oil find had triggered an energetic public discourse regarding the need to ensure the astute management of resources accruing from the sector as well as the prospects which oil discovery might hold for employment creation in Guyana.
On Tuesday, Hughes dropped a broad hint about the need for Guyana to guard against becoming ensnared in the corrupt practices in which other oil-producing countries have become entrapped. “How we avoid the challenges and pitfalls which have bedeviled countries which have enjoyed similar discoveries in the past is a critical issue with which the country will have to grapple,” Hughes said.
In the presence of an audience that included diplomats and state and private sector functionaries Hughes declared that the major problem looming ahead for Guyana in the face of the oil find is the need to create institutions, governance structures and policies and the development of human resources necessary for the beneficial development of oil and gas. “Perhaps more importantly will be the task of developing the energy industry so that it becomes a major driver for economic development while providing a platform for significant development of our people, our enterprises, our capital markets, innovation and technology. One of our long-term priorities must be how do we create an integrated and fully developed energy sector that is a key driver of a sustainable, local and regional economy while attaining global competitiveness in all of the sub-sectors,” Hughes declared.
And according to Hughes, “the fact of ownership” is only part of what he described as “the necessary national discussion on how we maximize the benefits from this national resource.” He said other considerations will have to include how we, collectively, develop the country’s oil resources in order to maximize local value in the sector; what is and will be the role of the oil and gas sector in the country’s national development and how Guyana benefits from the experiences of neighbouring Trinidad and Tobago and other oil-producing countries.
Hughes said, meanwhile, that given the fact that Guyana had no history of oil production the excitement created by the discovery, “can potentially create unrealistic expectations and the adoption of less than prudent approaches to the management of the revenues generated from this natural resource.” Accordingly, Hughes declared that among the issues likely to arise in discussing oil might be whether its production should be expedited or delayed and when would be the optimal time to commence production.
