Trinidad and Tobago former Minister of Energy, Kevin Ramnarine on Thursday urged Guyana to keep politics out of a state-owned oil company that it plans to establish to help govern the sector.
“Insulate your State enterprises from the politics and I believe that a percentage … so I would recommend that whatever State companies you form-it doesn’t have to be all- (put) part of the equity on the stock exchange,” he said in a public lecture that was organised by the Guyana Oil and Gas Association (GOGA).
The recommendation by Ramnarine, who was Energy Minister of Trinidad and Tobago from 2011 to 2015, comes as Guyana is advancing efforts to join the Norway-headquartered watchdog, Extractive Industries Transparency Initiative (EITI).
He recommended that the company’s board and management be insulated from politics to avoid politicians from exercising leverage such as asking for employment favours alongside support at election time.
Minister of Natural Resources, Raphael Trotman has already confirmed that Guyana would be establishing a state-owned oil company. “We think it’s a proven way of safeguarding patrimony and also at the same time building local capacities so that Guyanese can get to know and understand the processes of exploring oil and natural gas so a national oil company is definitely a feature that we will be seeing in our new legislation and framework,” he has told Demerara Waves Online News.
Trotman has said the national company would be a place of learning where they would be on a board and partner with major players ahead of the commencement of production and revenue-sharing. “For now, ours is going to be designed for the purposes of giving us a seat at the decision-making table and an opportunity to participate greater in the production revenues,” he has said.
Ramnarine suggested that Guyana sets up three state-owned companies- an upstream entity to partner with big companies like ExxonMobil, the second for the development of infrastructure and another for the marketing of valuable commodities. “Our new production sharing contracts in Trinidad allow the ministry to market their own hydrocarbons,” he added.
On the matter of production sharing agreements, he urged Guyana to retain that model as it is the best that would allow the country to get early revenue while at the same time protect the companies’ interest during low oil prices.
Meanwhile, he cautioned Minister of Natural Resources, Trotman against paying his ministry’s staff members low salaries or multinational oil companies would do what they have done in Trinidad and Tobago- hire them at higher salaries. “The effect of that is that you will end up with all the best and the brightest Guyanese working for Exxon and you will end up with the weakest people working for the government. Do not let that happen so Minister Trotman pay the people the equivalent to what they get in the private sector,” he said.
The lecture was held the same day that ExxonMobil announced the discovery of another oil reservoir offshore Guyana.