The government, through the Guyana Revenue Authority (GRA), has collected GYD$900 million from withholding taxes in the oil and gas sector for the first half of 2017, but there is no rush to establish the promised Sovereign Wealth Fund (SWF) as oil is yet to start flowing.
Minister of Finance, Winston Jordan said on Monday that the GYD$900 million represented earnings from activities in the sector, including resolution of outstanding related matters with companies.
As activities amplify, Jordan will travel to Washington this week to meet with senior Commonwealth officials who are helping Guyana craft a framework to establish the SWF, which many stakeholders hope will lead to greater accountability in the sector.
“The Commonwealth last year was involved in putting that fund together; they submitted a draft to the Government for which there was some feedback,” Jordan said.
The feedback led to Guyana producing its own draft guidelines based on best practices developed from other oil-producing countries. Both the comments from Commonwealth draft and the government’s document will be presented to Commonwealth for final discussions.
Jordan acknowledges that all of this is happening without the fiscal responsibility framework in place.
“We have put the cart before the horse. To know what you want to do; how much you have to save in what propositions you have to have some idea of fiscal responsibility. So we have asked the IMF to assist us there. They said they will be able to get somebody here by February next year,” Jordan explained.
Once the SWF is presented to Parliament, Jordan suggests the next move will be public consultations, but all of this takes time.
“It is not as if you need to have the sovereign wealth fund tomorrow because the oil is coming the next day. Oil is still some ways off. Let us get it right. The fact that you are not seeing a sovereign wealth fund I don’t know what that is supposed to mean. On the one hand when you rush things without the required consultations you get a lot of licks,” Jordan stated.
Guyana’s oil and gas sector recently received more good news when U.S. oil giant ExxonMobil Corporation announced it made a fifth new oil discovery after drilling the Turbot-1 well offshore Guyana, adding to previously known discoveries at Liza, Payara, Snoek and Liza Deep.
ExxonMobil, is poised to start pumping oil in 2020 from the Liza field, said to contain almost 500 million barrels of recoverable oil.