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Oil set to help Guyana boost economy and benefit its citizens

25 January 2018

The government of Guyana is set to implement new laws which will enable it to bolster its economy, tackle poverty and meet crucial sustainable development targets.

With the help of the Commonwealth, the Government is drafting new petroleum legislation which will see it maximise the benefits of the Liza oil field, which was discovered off the coast of Guyana in 2015.

The discovery, which was the largest in the world that year, could see Guyana’s economy benefit by many billions of dollars and help it meet the Sustainable Development Goals agreed by United Nations countries.

With the assistance of the Commonwealth, the Government in drafting an upstream petroleum policy, in addition to redrafting Guyana’s Petroleum Exploration and Production Act.

The Commonwealth has also played a central role in helping to design the country’s Sovereign Wealth Fund. This Fund is a vital step towards Guyana being able to effectively manage its oil revenue.

Commonwealth Economic Adviser Daniel Wilde said, “If used wisely, Guyana’s oil revenue could help it to fundamentally transform its economy and enable it meet key sustainable development goals. That’s why we have been working closely with the Government to draft new legislation to establish a Sovereign Wealth Fund. Once implemented, the Sovereign Wealth Fund should contribute to economic stabilisation, fairly transfer petroleum wealth across generations and maintain economic competitiveness. “ 

The Government of Guyana has been supported in its efforts to write the draft legislation which will establish the Sovereign Wealth Fund, and last month the Commonwealth helped organise a workshop to discuss this work. Senior officials from the Bank of Guyana, Guyana Revenue Authority, Ministry of Finance and Ministry of Natural Resources attended the workshop. The session was closed by the Minister of Finance and Minister of Natural Resources. 

In closing the workshop, the Minister of Natural Resources Raphael Trotman said, “I would like to signal the good efforts of the Commonwealth Secretariat, which has been coming quietly and confidently, building our capacities…as our principal partner in drafting our petroleum legislation.”

The legislation referred to by the Minister includes the Petroleum Commission Bill, Natural Resource Fund Bill and Petroleum (exploration and production) Bill. The Petroleum Commission Bill, which will be ready for parliamentary scrutiny this year, will enable the Ministry of Natural Resources to establish a petroleum commission and outlines its responsibilities, duties and powers.

The Commonwealth is committed to further assisting the Government ensure the effective regulation of the petroleum industry and that oil revenues are wisely managed for the benefit of current and future generations of Guyanese. 

The Government of Guyana will now submit a revised draft of the Natural Resource Fund Act later this month, before presenting the Act to parliament in the second half of 2018.