Monday, March 27, 2023

Guyana’s oil not another’s feast

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Guyana has always cherished its co-operation and collaboration with our sister CARICOM states. But the gap between talk and action breeds much skepticism about the regional integration project. For instance, I recall, as Agriculture Minister, the battles we fought to get Trinidad and Tobago to import some of our agricultural produce even when the region’s extra-CARICOM food import bill was US$4 billion, annually. TT had only cleared six crops to be exported with no poultry and small ruminant meats from Guyana. But, at the same time, TT was importing agricultural products and meats from North and Central America, and even as far away as New Zealand.

Our producers and exporters were required to climb the Mount Everest of regulations and requirements to get a few produce cleared for entry into the TT market. There are many examples, in other sectors, where red tapes and non-tariff barriers were deployed as devices (not forgetting the infamous Guyanese bench at Piarco) to frustrate our exports.

Mind you, I have no problem with TT and its people. Still paramount is the need to protect our interest, as the famous maxim in diplomacy reminds us: countries don’t have permanent friends, only permanent interests.

With Guyana on the verge of being the next CARICOM oil and gas (O&G) giant, we see TT in an overdrive mode to ‘lecture’ and ‘influence’ our course of development of this new sector aided and abetted by some local players. Guyana, like a new beauty, is suddenly dazzling the eyes of our TT counterparts and others whom are less bold.

We should be opened to the experiences of others, particularly those who share a common history, culture and the same regional grouping. For that reason, on March 1, 2013, I signed a Memorandum of Understanding with my colleague then in TT for mutual cooperation in the oil and gas sector. I am happy to see this reaffirmation of this mutual arrangement by the current Government. The operative word in that MoU was ‘mutual.’

There is, however, a feeling of entitlement by some in TT vis-a-vis Guyana’s oil and gas. A recent publication by Anthony Ryan of the University of the West Indies reflected an emerging mindset that our O&G sector should be seen as a feast for TT. The article, being circulated in academic and other quarters, strikes a condescending tone, enumerates the perceived ills and problems of our society and, as we say, gaves us ‘a good bad mouthing’ packaged as an analysis.

And then the author dishes out a self-serving solution: “The odds of a success are aided by Trinidad and Tobago, which has been providing technical assistance to Guyana since 2016. In addition to helping its neighbour develop its energy and gas expertise, Trinidad hopes its own refinery will soon begin crude.” I am curious as to what is this free `technical assistance’ and `help’ provided to develop our oil and gas sector.

What I do know is that TT has been one of the main beneficiaries of our O&G development. For exploration, TT companies and personnel were mainly used to provide a range of logistics and services dating back to the 2012 drilling campaign.

And more recently, several TT companies have incorporated Guyanese companies and cleverly created partnerships with multinationals to win a number of contracts for the first production phase of Liza 1. The space for provision of services to the local O&G is now becoming crowded with a formidable TT presence.

Our policy makers and private sector must be on guard. TT is very aggressive to get a chunk of the Guyanese O&G cake, potentially at the disadvantage of our own interest.

What should we do?

  1. We must continue to encourage TT, other CARICOM states and countries with experience in O&G states to invest and provide technical support, where necessary. This is not an excuse to dominate.
  2. There must be a cap on employment of non-Guyanese when these skills are available coupled with an aggressive multi-stakeholder programme on relevant skills development. Encouraging has been the on-going collaboration between the University of Guyana and the Ministry of Natural Resources to train our students at UG.
  3. The O&G companies must give preferential treatment or reserve services for qualified local suppliers, which are building experience and capacity for this new sector. TT has109 years experience in oil and gas so its companies will, at this juncture, beat any local company on the requirements for experience and capacity.
  4. A special incubation programme should be implemented for nascent local companies to build experience, expertise and capacity to adequately serve the sector.
  5. Multinationals working in the O&G sector should be discouraged from working through their TT affiliates and, instead, directly pursue joint venture-ship and collaboration with reputable Guyanese companies.
  6. A special fund (revolving loan at concessionary rates) created to assist small and emerging businesses to support and work in the O&G sector.

The above is not exhaustive and I am hopeful that the Government’s Local Content Policy and anticipated accompanying legislative and institutional steps will advance this thrust of ensuring Guyanese are the primary beneficiaries from the anticipated exciting opportunities.

There will be a period of transition where Guyana will need foreign support and investment to develop our local capacity. However, this must not be an excuse to deny our businesses and people the opportunity to grow and mature into this new sector.

We see, in other places, where the exclusion of nationals and local businesses in the O&G sector led to severe social and political repercussions. Let’s not be naïve, others are looking at our O&G sector for their next meal.

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