Would you sell your most valuable resource for about 25% of the price of what it was worth? That is what Canada was doing in November when they allowed the oil companies to sell Alberta crude oil for US$13 a barrel when the market price was US$54. This landlocked oil was costing the government millions of US dollars a day. Some of the oil companies were happy to obtain the oil at this price because they could refine it and get a much higher profit margin on this refined oil. The government finally started to take action by reducing the amount of oil produced which narrowed the gap with the market price. The problem became worse in summer 2018 as the government spent billions in an effort to expand pipelines to ease the landlocked problem. However, the expansion plan is stuck in the courts. Even if the expansion is approved, it will still be years before the price gap is truly narrowed. Certainly, the Canadian Prime Minister, Justin Trudeau, seems to be overwhelmed by this oil mess. Canada is a rich country with many industries, therefore, it can survive this debacle by its politicians. But Guyana cannot afford this type of incompetence overseeing its immense oil resources by its leaders.
Canada has been pumping oil for decades, so why didn’t its leaders anticipate this landlocked issue? One can’t help but wonder if Canada had political leaders who were versed in oil, if they could have avoided this crisis? There have been many articles written about Guyana’s awful oil contract. If there is a defence, it was that our leaders were new to this game and were no match for companies who have spent decades perfecting their negotiation skills in the oil game.
If you are going to put together a cricket team from Saints high school to play against one from Queen’s College, you would want a coach who at least knows the rules of the game. You cannot have a teacher acting as a coach who lacks basic knowledge of the game. The coach has to make the decision to field the best set of bowlers against a particular school’s batsmen. If the teacher doesn’t understand the type of bowlers and their effectiveness against particular batsmen, no matter how smart he is, he would be confused by all the lobbying he would receive from the students who want to be on the team.
As reported in the media, it appears Mr Ramson Jr will not make the short-list of the PPP presidential candidates. Just based on educational background, I would select Charles Ramson over the Canadian Prime Minister Justin Trudeau for an economy that is heavily dependent on oil. Mr Trudeau is not a seasoned politician. Furthermore, he runs a large resource rich country like Canada without any educational background in resources. If Trudeau can be Prime Minister of Canada, why can’t Mr Ramson who is knowledgeable about oil not even make the shortlist of presidential candidates of one of the major parties? Ramson was educated at Queen’s College and then went on to study law in England and the West Indies. Subsequently, he resigned as a Member of Parliament and showed vision by going to the UK to obtain a Masters in Oil and Gas Enterprise Management. These are the types of candidates we should have in all parties, that is highly educated leaders who see where the puck is going and skate towards it.
Because we are new to the oil game and we are a small population, we only have a few Guyanese who have experience in the oil industry. Whichever party is in power after the election, they should leverage the knowledge of Dr Vincent Adams, Melinda Janki, and Dr Jan Mangal. If you don’t employ these oil experts, how do we expect to maximize the benefit from this resource? The game is oil, we need leaders who are versed in the logistics and economics of oil.
There will be many candidates for multiple positions both in the ruling party and the other parties. We should select candidates who show a willingness to learn about oil, its impact and benefits to Guyana. We should have political leaders who are brave enough to prevent the oil companies from even selling a barrel of our oil for US$13. If we don’t, how will we avoid the resource curse? Conservatively, with oil at US$50 a barrel and 5 billion barrels of oil confirmed, there is US$250 billion at stake.