Oil, an indispensable factor in numerous economies, account for about 2.5 percent of the world’s Gross Domestic Product (GDP). According to Forbes online, it accounts for one-third of the primary supply for the world’s population, and if natural gas is added, then it would account for half.
Guyana, a small country preparing for an emerging oil and gas industry, therefore needs to make sure it has all the necessary pre-requisites in place to guarantee the success of such a critical industry.
Unites States oil giant, ExxonMobil recently announced its third oil find offshore Guyana, South America. Dubbed the ‘Snoek’ discovery, this follows the other two successful finds at the Liza 1 and the Payara 1 wells.
Buisness Insider said the US Geological Survey estimates the oil and gas reserves in the Guyana-Suriname basin at 2.79 billion barrels of crude.
The country’s Prime Minister, Moses Nagamootoo said that Guyana must get it right and ‘get it right from the beginning’. This, he indicated, would involve international buy in with best practices.
Speaking at the recently held Oil and Gas conference at the Marriott Hotel, Guyana, the Prime Minister commended the formation of the Oil and Gas Association noting that there will be no political relation of organisations involved in the industry. He proffered that they can help to improve practices in the sector from the very beginning.
Mentioning the Guyana Government’s plans to set up a Sovereign Wealth Fund, the Prime Minister stated, “We endorse fully, our government, that a proportion of the proceeds from this new industry should go towards, one, the future of our country, to be invested in the development of strategically necessary resources -infrastructure and in the education and health of our people.”
Neglect for agro potential?
Forbes also underscored that ‘oil is about as important to the developed world as agriculture’ and it’s truly a condition for the continued existence of most of humanity today.
The fact that Guyana is expected to begin oil operations in 2020 is a learning experience for citizens, and according to Prime Minister Nagamootto0, while “we may feel very elated in the world arena today to be described as the new frontier for oil and gas, we are also cautious that we shouldn’t allow ourselves to be so carried away as to look at our potential wealth with arrogance.”
Citing sustainable employment opportunities as one of the benefits from the oil and gas industry, the Prime Minister posited that the needs of young people will be catered for.
However, he urged against neglect for the country’s agro potential at the altar of oil wealth.
“I am conscious that while we speak about local content, oil and gas I am very conscious that the industry itself will provide employment that would cater for the needs of our young people in particular… we have to look at how we develop an integrated economy, and not allow ourselves to concentrate on oil and gas and neglect our agro potential, our potential for aquaculture for fisheries…” the Prime Minister explained.
With the resources from oil and gas, Mr. Nagamootoo posited that revamped infrastructure would allow Guyana to revert to what it was at one time, the ‘food basket’ of the Caribbean. “We can become a guarantor of food security,” he stated.
Alluding to oil producing countries not developing their alternative industries using oil wealth, the Prime Minister spoke of the challenges the local sugar sector is facing.
The Guyana Government has been bailing out the sugar industry, amassing about G$32B in bailouts since 2015, hence it has been plugging diversification into other areas such as aquaculture, apiculture, orchards and rice production.