The Organisation of Petroleum Exporting Countries (OPEC) has its eyes on Guyana but its efforts at persuading the South American nation to join the group have been unsuccessful to date.
“We don’t want to be part of OPEC at this point in time,” were the words of Vice President, Dr. Bharrat Jagdeo in a comment to The Wall Street Journal.
It should come as no surprise why the Saudi Arabia-led OPEC wants Guyana in its ranks. With 11 billion barrels already found and a clear line of sight to boost production to 1.3 million barrels a day by 2027, Guyana would be a key new member for the oil cartel. The country ranks among the top non-OPEC+ producers set to push global supply growth alongside Norway and the US.
But joining OPEC was never in Guyana’s plan. And does not appear to be. A big concern is OPEC’s frequent production cuts. Guyana’s depletion policy, as said by Dr. Jagdeo, is for the country to produce as much oil as possible. And this could be curtailed as a member country of OPEC.
The cartel’s recent production cuts have not been welcomed by some in the West, considering that the energy market is recovering from the pandemic. The International Energy Agency (IEA) has traded harsh words with OPEC because of it.
The Executive Director Fatih Birol in a Bloomberg interview said it should be “very careful” with its production policy, warning that its short-term and medium-term interests seem to be clashing. Birol said that higher crude prices and upward inflationary pressures can lead to a weaker global economy, with low-income nations in the direct line of fire.
The cuts were also the reason why Brazil reportedly did not join OPEC back in 2020.
Currently, OPEC has 13 members; Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela.
