Incompetence, greed and fear main reasons petro-countries do badly – Anthony Paul

High levels of incompetence, greed, and the fear of making tough decisions are the primary reasons countries rich in petroleum resources do badly. So says Managing Director, Principal Consultant of Association of Caribbean Energy Specialists Ltd. (ACES), Anthony Paul.

Paul, a Trinidadian by birth and the author of Guyana’s draft local content policy framework, said in a Facebook post on August 6 that the twin-island republic’s oil and gas industry soared to mercurial heights from political independence in 1962 to the 1990s. This was accomplished, he said, “on the back of strong policy, legal and institutional frameworks, administered by competent people of high integrity, relatively well compensated and confident in themselves and our countrymen and women, staying true to a vision of employing the skills and resources of our people to transform us into an economically independent and resilient nation.”

However, much has changed in the last 20 years, the consultant said, resulting in a rapid decline in the principles that propelled Trinidad and Tobago’s petroleum industry. “Over the last two decades, we experienced a spectacular decline in these values. The current state of the sector is a manifestation of gross incompetence, compounded by greed, now reacting out of fear,” he stated.

Incompetence is a “harsh” word, Paul said, “but it encompasses gaps in multiple dimensions of capability – skills, capacity, experience and behaviour. It shows up in poor decisions along the entire value chain – investor selection, pace of investment, contracting, implementation oversight, reporting, transparency & accountability.”

The calibre of personnel filling key oil and gas positions in Guyana and negotiating with International Oil Companies on the country’s behalf has been a major focal point, with some in civil society saying that the government has failed to hire experts with the experience needed to be effective in this regard.

Paul, reflecting on the Trinidad experience said, “Corruption and fear are outcomes of incompetence. We have to fix our agencies first if we are to fix T&T. We need to hire the best people, reward them well and hold them accountable.”

With a history of corruption in public office and the lack of strong institutions that allow for transparency and accountability, the new coalition government in Guyana has been under increasing pressure to ensure that it puts the right systems in place in preparation for first oil, come 2020.   

US oil major ExxonMobil, operator in the 6.6 million acres Stabroek Block, is already putting systems in place for multiple developments to come on stream by 2025 that could see as much as five Floating Production Storage and Offloading (FPSO) vessels producing around 750,000 barrels of oil per day.

Guyana, Paul said, runs the risk of too much revenue coming in too soon. “The absorptive capacity of the economy and efficiency of government revenue management will be severely challenged. Guyana has to make choices on pace of production,” he said.