The socio-economic development of many developing countries, like Guyana, have been stifled because of their enormous fuel importation bills which take more than half of their total GDP in some instances.
The United States Agency for International Development (USAID) in a policy paper notes that “oil is the predominant source of commercial energy in developing countries. Oil currently supplies over 90 percent of the commercial energy used in Latin America, over 80 percent in the Near East and-excluding two large coal producers, India and Zimbabwe-more than 75 percent in Asia and Africa. Because oil use is closely tied to industrial output and transport, constraints on its availability or affordability can seriously impair export earnings and total economic output. Such heavy dependence on oil can be expected to continue and even increase as countries develop. Economic growth in the developing countries will require substantially greater inputs of fossil fuels for commercial energy.”
Cyclical price jumps for fuel and by products of oil are inevitable and most times happen quickly and suddenly triggering a consequential skyrocketing in costs of transportation, food etc. which aggravates poverty in these countries. As such many countries are working feverishly to develop renewable sources of energy and reduce dependency on fossil fuels which is also in accordance with the new global initiatives aimed at rolling back global warming and climate change, now widely accepted as a major challenge to man.
USAID points out further that developing countries use energy from fossil fuels (oil, natural gas, coal), nuclear processes (excluded from USAID assistance), and renewable sources (biomass, hydropower, wind, sun, geothermal). Most countries must import energy to supplement limited indigenous sources.
Most economic sectors in developing countries require a mix of energy sources to meet national energy needs: fossil fuels and electricity dominate modern agriculture, industrial uses, and urban building systems, although charcoal and wood are sometimes used. Oil is virtually the only fuel used in modern transportation, but many people continue to rely on foot travel and animal carts. Electricity is generated from fossil fuels, hydropower, and nuclear energy. Human and animal power are a major source of energy for traditional agriculture. And traditional fuels (fuel wood, charcoal, crop residues, dung) are the principal source of energy for cooking.
But while the long term solution is the use of renewable sources of energy, their development requires huge funding, advanced and expensive technology and high level experts. The financial and other resources required in many countries cannot be found within these countries and therefore they have to be obtained through foreign investors and this normally proves a huge challenge. As such the time for these projects to fructify could be excruciatingly long.
Therefore, in the shorter term many countries, such as Guyana, are forced to seek investments in offshore and onshore oil exploration with the optimism that they will be successful and eventually their dependence on foreign importation of fuels will be eliminated or significantly reduced.
In this regard, the recent revelation by CGX Energy Inc. that an independent resource assessment by Gustavson Associates LLC (Gustavson) of Boulder, Colorado, USA for three prospects on the company’s Corentyne offshore Petroleum Prospecting Licence (PPL) has indicated an estimated 2.8 billion barrels of oil off Guyana’s Corentyne shore.
“Using probabilistic analysis, Gustavson calculated a total best estimate (P50)Prospective Resource as of February 1, 2010 in three prospects to be 2.8 billion barrels of oil,” the Canadian-based CGX said in a statement.
The Report is limited to an estimate of the potential undiscovered oil and gas prospective resources underlying the Corentyne Offshore PPL, and CGX said the assessment was done in an area covering approximately 9,180 sq kilometers net.
As of February 1, 2010, CGX said it held an interest in four Petroleum Agreements (PA) covering approximately 34,723 sq kilometres gross (approx. 28,197 sq km net) offshore and onshore Guyana.
This certainly makes our prospect for joining the oil producing nations an optimistic one and perhaps we would have already reached this point and beyond had it not been the senseless action by Suriname which used forced to eject CGX Inc. from the Corentyne offshore. Repeated efforts by Guyana to have the matter settled bilaterally in an amicable and just manner proved futile forcing this country to take the matter to the UN Maritime Tribunal which ruled in its favour. But not after taking over two years to hand down its ruling and at tremendous financial costs.
Nevertheless, we can feel a sense of consolation from the old adage: “Better late than never.”