‘Government lacks the expertise to market oil’, AFC warns

Responding to a recent announcement by the Minister of Natural Resources that Guyana will no longer enlist the services of experienced firms to market our crude and will instead seek to market the nation’s crude directly, the Alliance for Change (AFC) has warned that the government frankly lacks the capacity to market its crude oil. In a press statement the AFC said, “The AFC, therefore, cautions the PPP administration not to get involved in the direct marketing of crude because the government does not have the expertise, administrative infrastructure nor logistics capacity to successfully undertake crude oil marketing.”

In defending his decision, the Minister of Natural Resources Vickram Bharrat argues that by marketing Guyana’s crude directly the nation would save the $25,000 USD per lift that is currently paid to the marketer. It is necessary to note that, at the current price of $95 per barrel, this fee represents 0.026% of the value of a lift of Guyana’s oil. For every $1 below the market price Guyana sells our oil the nation would lose $1,000,000 USD. This is over 40 times the fees currently paid to the marketer.

The AFC further warned that, “The announcement by Minister Bharrat raises doubts about the real intentions of the PPP regime. It should not be viewed in isolation of the recent events, including rushing the Natural Resources Fund (NRF) legislation through the National Assembly, the diversion of the funds to finance Budget 2022 with no checks and balances and the removal of the head of the GYEITI, Dr Rudy Jadoopat, who has a stellar track record and international accreditation.”

The PPP continues its push to concentrate power and control of Guyana’s emerging petroleum industry and oil wealth in the hands of their inexperienced government, reeking with corruption. This exposes Guyana to significant risks. The AFC thus cautioned that, “The PPP regime should not traverse beyond the usual bilateral agreement between nation-states, and all such resulting commercial contracts should be subject to parliamentary oversight and approval.”