Last Updated on Tuesday, 2 April 2019, 18:51 by Writer
Guyana is to receive a US$20 million World Bank loan for its Petroleum Resources Governance and Management Project to prepare the country to deal with several oil and gas risks.
The loan was approved on Friday, March 29.
“This Project will enhance the transparency, governance, legal, regulatory and institutional frameworks for the oil and gas sector in Guyana,” the Finance Ministry said on Tuesday.
The Guyana government said it is borrowing the money to help put in place systems to stave off risks associated with being a new oil and gas (O&G) producer.
According to the Finance Ministry, the loan will be spent on addressing governance and management risks from inadequate policy, legal and regulatory frameworks and institutional capacity needed to maximize the benefits from expected oil revenues, and to minimize downside risks associated with oil revenues and growth of the sector.
“As such, the components of this loan reflect the reality that the O&G sector will affect multiple layers of the economy; impact the livelihoods of present and future generations; the environment and local communities; and that if poorly managed, the development of O&G resources can be economically and socially costly for the country,” the Finance Ministry said.
Also to be addressed, according to government, are environmental and social risks – usually infrequent but with high impact – associated with O&G production that require effective and constant monitoring, as well as significant investment in environmental damage prevention and response capacity, among others.
Provision will be made to review Guyana’s legal and regulatory frameworks for the O&G sector aimed at maximizing benefits to the country and affected communities, managing the technical, environmental, social, and financial risks linked to the sector, and building capacity to engage effectively with investors.
Institutional capacity to oversee and manage the O&G sector in the various relevant government ministries, commissions and other departments will be created using consultants, initially, but with a view to ensuring local personnel are trained to replace technical advisers over time.