Middle East

Guyana approves sovereign wealth fund, local content rules


December 30, 2021

File Photo: Stavroque block drillship off the coast of Guyana (Photo: Hess Corp.)

Guyana’s parliament approved local content rules for oil producers and sovereign wealth funds on Wednesday to oversee South American countries’ earnings from emerging oil jackpots.

International oil producers have discovered 10 billion barrels of oil and gas that promise to transform Guyana’s agricultural and mining economy into an oil powerhouse that provides billions of dollars to a country of about 800,000 people.

The bill is part of an update to the national regulatory framework for oil exploration and production. The local content bill requires energy projects to use local businesses for specific jobs, including environmental research and metalworking.

ExxonMobil, who previously heads the oil production consortium, plans to build a supply base in Guyana for future projects. The country is also planning an offshore leasing auction next year that could lead to new oil development and profits.

The Natural Resources Fund assigns oil revenue oversight to Congress rather than the Treasury. According to the bill, revenue could be used for development and “significant projects directly related to improving the impact of large-scale natural disasters.”

Opposition lawmakers opposed the fund bill in a noisy hearing, with opponents whistling and trying to stop the passage by obstructing the procedure. It was approved by a voice vote with amendments.

The Private Sector Commission, which consists of the country’s most powerful projects, supports the Resource Fund by saying it provided “for Congressional oversight of the expenditure of these resources to promote greater accountability and transparency.” did.

“Note that the unrestricted dismissal of the authorities entrusted to the Minister of Finance under the 2019 Act and the subdivision of some of these responsibilities to other authorities and regulators,” the PSC said in a statement. Stated.

With approval, the invoice goes to President Irfaan Ali’s desk for his review. If President Ali signs the bill by December 31, the government will be able to spend oil money on next year’s budget.

(Report by Neil Marks and Marianna Parraga, edited by David Gregorio)

https://www.oedigital.com/news/493195-guyana-approves-wealth-fund-local-content-rules-for-expected-oil-boom Guyana approves sovereign wealth fund, local content rules

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