As a nation, we are approaching the point of possibly becoming a major producer of oil and gas producer, though just how big a player we will be can only be determined with the passage of time in circumstances where our understanding of the industry, its dynamics and its complexities is worryingly limited.
This much has manifested itself and the fanciful ‘rags to riches’ perception that had developed across much of the country during the years when we were ‘wishing and hoping’ for an oil discovery, which had more or less caused us to blind our eyes to the broader permutations of being a part of the sector.
The period between the (May 2015) announcement of an oil find and the anticipated time line for exploitation and recovery is perhaps much shorter than one might have thought (not too many years ago the time line between discovery and recovery would have been at least a decade) so that the Government of Guyana currently finds itself focused on entering the various agreements (including those with ExxonMobil) that have to do with exploitation. In other words we have had to ‘hit the ground running,’ so to speak.
At the level of government, there have also been efforts to enhance the national oil and gas knowledge base. The President/Government has recruited an advisor on the sector and there have been discourses with the Government of Trinidad and Tobago which we are told will eventually metamorphose into an agreement that will result in technical help from the twin-island, oil-producing, Caricom sister country.
Local public education on oil and gas has been confined mostly to the media spinoff that has derived from the various oil and gas fora organized mainly by government though the apparent level of public involvement suggests that anything even remotely resembling an understanding of the dynamics of oil and gas and the various ways in which it will affect local communities, the environment and the economy is confined, largely, to a minority of people who, for one reason or another, have an active interest.
One of the most interesting environment-related issues has to do with squaring the circle between maximizing the economic opportunities afforded by oil and gas and remaining mindful of the importance of maintaining an environmental balance.
By now we know more than enough about the environmental downside of a mishandled oil and gas industry to say nothing about the persistent ‘green economy’ reminders being issued by President Granger. It has to be said that those reminders may yet serve to ‘keep us honest’ as the saying goes, in circumstances where there has precedent in terms of dangerous environmental recklessness in oil economies.
Since the critical areas relating to oil and gas recovery and the refining of oil will not be those in which Guyana will be operationally involved, attention has shifted to what one might call the attendant spin-off services. There has already been some measure of private sector discussion about just how local companies (including some that are probably yet to be formed) can benefit from the sector including specific discourses on particular service areas in which we can become involved.
One of the issues that arose during an informal discussion had to do with the need for on-shore Guyanese service entities to ‘invest in standards,’ so to speak, that is to say to familiarize themselves with the quality of service which a company like ExxonMobil is likely to demand.
What the oil and gas sector is also likely to do is to create a more robust local private sector and, hopefully, create a more realistic balance between government and private sector since, truth be told, we are yet to make up our minds (or at least so it seems) about whether or not the private sector is ‘the engine of growth’ or whether that is simply a pipe dream.
In the final analysis most of the local earnings from the oil and gas industry will belong in the Consolidated Fund, that is to say that responsibility for spending will rest with Government. We may as well be open about the corruption-related concerns that have come to be associated with Government and, moreover, to grow accustomed to debating those concerns openly. Once we begin to see the returns from this newfound resource strong mechanisms will have to be put on place to safeguard against corrupt practices.
On the whole, oil and gas is an opportunity which Guyana has to grasp with both hands and the process of so doing has to begin long before the first measure of the resource is brought to the surface from the sea.
