Guyana will be spending US$20 million on preparing the country get its rightful share of earnings that oil companies like ExxonMobil have agreed to pay government, Finance Minister Winston Jordan said Friday.
“Unless we can get processes, legislation, bodies and monies all coming together, it will be a difficult proposition trying to match our wits with a giant like ExxonMobil,” he said.
Jordan said US$20 million of a US$90 million loan from the Inter-American Development Bank (IDB) would be spent on crafting new legislation for the Sovereign Wealth Fund as well as establishing and strengthening new departments and units at the Guyana Revenue Authority (GRA), Ministry of Natural Resources, Ministry of Finance, Department of Energy, Bank of Guyana, and Guyana National Bureau of Statistics.
“We are going to try to get experts to set up these critical units,” the Finance Minister added.
His announcement came about one month after the Trinidad and Tobago government said it was not getting sufficient from its oil and gas sector due to leakages, causing a significant drop in revenue there. Chairman of the Trinidad and Tobago Transparency Institute (TTI), Dion Abdool has emphasised the need for Guyana pays close attention to inflows and outflows by accounting, reconciling revenues. ExxonMobil has already acknowledged the intended role of the Guyana Extractive Industries Transparency Initiative in cross-checking the revenues that would flow from oil revenues.
Guyana is entitled to two percent royalty and 50 percent of profit oil- 12.5 percent of overall earnings. The Finance Minister remarked that whether or not the Production Sharing Agreement with ExxonMobil is a good deal, the country would for the first time receive unprecedented amounts of cash. “There is going to come to Guyana a significant sum of money unheard of in the history of Guyana,” he said.
The IMF estimates that Guyana’s Gross Domestic Product will skyrocket to 38 percent in the first year of oil production set to be in 2020.