Monday, February 6, 2023

Guyana following in footsteps of Qatar, Saudi Arabia, UAE

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While they may be oil-dependent, Middle Eastern nations such as Qatar, Saudi Arabia, and the United Arab Emirates (UAE) have a well-established history of responsible energy stewardship. Shrewd governance has not only contributed to decades of sustainable growth, but massive improvements in the standard of living for its people.

According to President, Dr. Mohamed Irfaan Ali, these are the nation’s Guyana will be using as its primary role models on how to craft its blueprint for effective oil and gas management.

In this edition of Energy Insights, we take a brief but necessary look at the footsteps of the countries Guyana is to follow and the extent of the Guyana-Middle East courtship thus far.

Qatar

Stretching just less than 4,500 square miles with a population of about 2.88 million people, Qatar is the world’s second-largest exporter of natural gas. It also holds the third-largest proven natural gas reserves in the world and is also home to the world’s largest liquefied natural gas company, Qatargas.

Hydrocarbons, since the 1930s, have been the heart of its economy and leaders have used it much to the benefit of its people. Today, Qatar enjoys one of the highest living standards in the world since its citizens have access to free medical care, childcare, sickness cover, maternity cover and many other benefits even when unemployed. In some cases, the government gives free housing and financial benefits for the disabled. Qatar also provides free education for all citizens. Its poverty levels are staggeringly low.

Since assuming office, President Ali has engaged several Qatari officials to advance discussions on opportunities for knowledge sharing.

Thus far, Guyana has had an audience with high profile executives of Power International Holding, a diversified Qatari conglomerate involved in agriculture and food industries, real estate and lifestyle (including hospitality, entertainment and catering).

In October, a Qatari delegation also engaged President Ali and Prime Minister, Brigadier (retired) Mark Phillips on developments in Guyana’s oil and gas sector. Government has said the Qatari connection is of particular importance, especially when one considers its experience in gas development, which is a direction Guyana is heading in with its Gas-to-Energy project.

Kingdom of Saudi Arabia

The energy sector is the backbone of the Kingdom of Saudi Arabia, which is inhabited by 35 million people. The Kingdom, considered the birthplace of Islam, possesses a quarter of the world’s proven oil reserves. It is also the world’s largest producer and exporter of oil. It also has one-sixth of the world’s proven petroleum reserves – more than 260 billion barrels.

Given the size of its resources, Saudi Arabia plays a unique role in the global energy industry. Its policies on the production and export of oil, natural gas and petroleum products have a major impact on the energy market, as well as the global economy.

As a founding member of the Organisation of Petroleum Exporting Countries (OPEC), and currently, its largest producer, Saudi Arabia has a leading role in guiding the organisation to promote cooperation in energy issues, often acting as its principal moderating force.

Like Qatar, many welfare services are free for its people. Its companies are not taxed on their profits.

In October 2022, Guyana signed an Air Services Agreement with the Kingdom of Saudi Arabia to promote and facilitate the expansion of international air services for the promotion of business opportunities between the two countries.

Guyana continues to engage the Kingdom on cooperation for other critical issues pertaining to climate change and oil and gas. In fact, President Ali has said he wants the Kingdom to have a permanent footprint here. He has since offered land for the establishment of an embassy in Guyana to deepen bilateral relations.

United Arab Emirates

The UAE, a federation of six emirates, discovered oil in the 1950s. Today, it holds 10% of the total world supply of oil reserves and has the world’s fifth-largest natural gas reserves. Abu Dhabi National Oil Company (ADNOC), its state company, is a global leader in the oil and gas industry and is active in all sectors of the hydrocarbon industry.

Guyana has thus far engaged this global powerhouse on several issues. In fact, a forthcoming partnership between the Governments of Guyana and the United Arab Emirates is expected to see 150,000 Guyanese receive software development training. This is in keeping with President Ali’s dream to make the country a major player in the technology industry.

Guyana and the UAE have also concretised government-to-government partnerships with the inking of a new Memorandum of Understanding (MoU) in March that aims to strengthen Guyana’s governance systems as well as its institutional capacity to manage the oil sector.

Vice President, Dr. Bharrat Jagdeo, was also recently in the UAE where he led critical discussions with officials on climate change, cyber security, and oil-related matters too. This builds on previous discussions held on investment opportunities for food security.

Conclusion

If all goes well, Guyana’s move to deepen its Middle Eastern connection will be recorded as one of its most powerful and transformative foreign policy plays.

Government is not only diversifying Guyana’s portfolio of allies but also positioning itself to learn from three well-connected giants. Throughout, the country’s sense of individuality which is hinged on fortifying agriculture, manufacturing, and other industries to be major growth poles, is still being preserved.

Should Guyana succeed, she will be the ideal personification of diversified growth, and no doubt, in a class of her own.

About Energy Insights

From the people who bring you day-to-day coverage through OilNOW – the Caribbean’s premier oil, gas and energy information service – the Energy Insights column offers perspectives and analyses on the evolving energy sector in the South American/Caribbean region, and further afield.

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