Guyana and oil

Hardly a day passes without some kind of public reportage on the subject of oil. It has been so since a May 25th, 2015 ExxonMobil media release had disclosed that the company had made a “significant oil discovery on the Stabroek Block, located approximately 120 miles offshore Guyana” and that, according to Mr Stephen M Greenlee, the President of ExxonMobil, the company was “encouraged by the results of the first well on the Stabroek Block.”

ExxonMobil’s disclosure had finally put meat on the whitening bones of a decades-old daydream into which much of the nation had drifted, and which, over time, had been held together by persistent urgings from our political leaders on the subject of Guyana’s “untapped oil wealth” and what that might portend for the future of the nation.

The prospect of oil had never quite managed to afflict us with the malady of tunnel vision.  The dream of oil has always been attended by a sense of proportion and pragmatism.  Indulgence in the vision of an oil-driven economy had always been tempered by the exigencies of us having to satisfy our immediate needs, so that we were never possessed of the luxury of being able to wait around.  With oil, it seemed that as a nation we simply settled for postponed gratification, at best. Frankly, whatever the political spin that was being put on the prospects, oil, had always existed in the collective Guyanese consciousness as perhaps, a longer-term likelihood which, if it eventually materialized, would do so in its own sweet time.

That is not to say that we, like much of the rest of the world, had not, over time, been taking note of global events in the oil industry, not least the transformative effect of the cartelization of oil that manifested itself in the economies of the five founder members of the Organization of the Petroleum Exporting Countries (OPEC) (Vene-zuela, Iran, Iraq, Kuwait and Saudi Arabia).  Indeed, it is likely that  the good fortune that the commodity  brought the beneficiaries may well have helped, in a sense that would be difficult to measure, to keep our own dream alive, though, as has already been mentioned, we never really countenanced the indulgence of exalted expectations.

OPEC and its spin-offs apart, hopes of an oil find here had also been kept alive by the comings and goings, over time, of the various expatriate oil seekers and by their speculative but tantalizing pronouncements about “the prospects” of a major ‘find’ here.

Public response to the May 2015 ExxonMobil disclosure was almost certainly tempered by the fact that it had to compete for public attention with the immediately preceding general elections and their outcome. If there was no way in which the extent of the attendant celebration of our oil find could be measured in the prevailing environment at the time, there was no disguising what is perhaps best described as the national ‘feel good’ sensation that the announcement of a major oil find brought  the nation.  As it happens, since then, much of the public speculation about oil and its prospects have been driven by an understandable lack of local understanding of how the global industry works. Quite simply, we are almost thoroughly unfamiliar with the rules of the game. If that is changing it is taking its own time to do so.

What arises not infrequently in the realm of public chatter is just how we would fare with our ‘oil wealth,’ those discourses being influenced by the fact that we, like the rest of the world, have borne witness to both the blessing of economic fortune that oil has bestowed on some nations and the curse of corruption, lavishness, profusion and a predilection for official plunder that it has visited upon others. Predictably, local petro-chatter has not omitted to speculate on which way Guyana will go, that discourse driven by a strong sense that we are by no means immune to those vices that have afflicted other countries whose populations have not so fared well from their oil ‘fortunes.’

But there is a more immediate issue ahead of the promised 2020 start of oil exploitation which is unfolding at a lesser level of public discourse, the simple truth being that the sum total of our knowledge of the sector seriously places restrictions on public participation in some of the more important aspects of the agenda. That agenda includes issues like whether the humongous difference between the US$18 million signing bonus received from ExxonMobil and the view in some quarters that the amount should have been at least several hundreds of millions more does not merit a vigorous attempt at re-negotiation and whether or not the Guyanese business community is ideally positioned to optimally benefit from the local content dimension to the oil deal ‒ and those are by no means exhaustive.  But then we are the newest kid on a pretty sophisticated block. Even government has been making no secret of the fact that it too is trying its best to negotiate what is a formidable learning curve.

The media, meanwhile, is exerting much to keep up, in the absence up until now of any really serious oil training. Reportage ensues courtesy of an almost complete reliance on ‘sources’ that are presumed to possess a greater measure of expertise. That, surely, has to be corrected as a matter of urgency since it is almost certainly the case that the level of participation in the public discourse on oil needs to be significantly extended.

So that while May 2015 marked a quantum shift from the realm of likelihoods and probabilities in which we had previously dwelt, we have now done no more than succeed in uncovering another, more demanding  layer of challenges that has to do with the journey from discovery to recovery and worthwhile exploitation.  Almost three years on, that sense of euphoria has been arrested by the realization that the journey between the discovery of oil and its exploitation for the benefit of a nation that has been living in the daydream for decades is not a matter of automaticity. It is whether, having been aroused to the reality that the oil is really there, we can, as a nation, use it to the transformative effect that we have been seeing in our daydreams for all those decades.

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