The Guyanese government recognizes the appeal of its newfound treasure off the country’s coast and has assured that future oil contracts will generate more profits for the government, writes Arthur Deakin, Co-Director at Americas Market Intelligence (AMI) Energy Practice, in his latest column published on OilNOW. Yet, the PPP/C administration also recognizes the need to pump out as much oil as possible while “there is still demand” for fossil fuels. As a result of this, Deakin said they are faced with a “Catch 22”: accelerating oil production and increasing oil profits, while at the same time depending on changing energy demand and companies seeking to maximize their shareholder returns.
“The first solution for Guyana is to diversify its economy in a proactive and thorough manner,” the AMI analyst said. “Another proposition is to transform itself into a new type of oil and gas producer: one in which fossil fuel production is mixed with [Carbon Capture Storage and Utilization] CCSU technologies, cleaner power generation, and nature-based solutions.”
To promote CCSU at home, and create a more sustainable oil and gas sector, the Guyanese government will have to develop business-friendly regulations to attract these types of investments.
Deakin said these strategies must also be accompanied by the highest level of transparency and accountability in government.
“President Ali appears to recognize the urgency of the situation, as he recently pledged to create the Petroleum Commission by year’s end. While implementing these important regulatory changes, the government must include incentives for CCSU, renewable energy and nature-based solutions,” he said. “The path is being charted for Guyana to become an energy powerhouse, but without these strategies, it is “more likely than not” that it will be left behind in this rapidly changing energy sector.”
Guyana’s Vice President, Dr. Bharrat Jagdeo has made it clear that the government intends to pursue policies that would allow for maximising benefits from its vast hydrocarbon resources while taking into account the country’s green initiatives.
“We believe that we can develop the industry in our country, it can grow rapidly, it can produce the wealth that could help us to change people’s lives and that’s crucial for us. We can do so, in Guyana’s case, by continuing to invest in and using some of these resources to invest in a decarbonized future consistent with our low carbon development strategy which will evolve,” Dr. Jagdeo told participants at a session held last week at the Offshore Technology Conference.
These investments include a new energy mix being pursued by the government that would include a combination of gas, hydro, solar and wind power to fuel the rapidly expanding Guyanese economy.