ON Thursday, government announced that it will be granting a production licence to ExxonMobil for production of petroleum to move ahead in 2020. The administration also announced that the licence will place emphasis on Guyanese employment and training, the procurement of goods and services in Guyana, infrastructural soundness and protection of the environment.

Guyanese continue to greet any news of development of our oil find with much anticipation of the potential this resource holds in improving their standards of living. An oil find is always associated with aiding the wealth of a nation and its people, given its price on the world market. Yet this ‘black gold’ if not properly managed can bring hurt to the very people and society where it has been discovered and ought to benefit. According to the Ministry of Natural Resources, extraction from the Liza field is expected to commence in 2020 at an initial rate of 100,000 barrels of crude per day in the first phase, with a Floating Production Storage and Offloading (FPSO) vessel providing the main infrastructural support for the project. The Government and people of the Cooperative Republic of Guyana will receive a royalty of 2 percent on gross earnings and benefit from 50 percent of the profits from the sale of petroleum once production commences.

Admittedly, Guyana has a paucity of human resources to harness and extract this resource independent of foreign support. This find by Exxon, outside of the country providing the required indigenous framework approval and laws, the exploitation will be at the behest of the brainpower of foreign nationals. Where revenues garnered from oil wealth do not see widespread distribution in employment and economic opportunities for Guyanese, development in social services and infrastructures, the risk of entrenching two societies is real. A situation can occur– as evident in some oil- producing countries– where some areas are relatively more developed and others see the people living in squalor, denied opportunities, left to contend with crumbling infrastructures and the absence of quality social services.

The Ministry of Natural Resources has assured that it and other ministries and agencies are actively pursuing a number of undertakings on the policy, legislative and infrastructural sides to ensure that the country is prepared for the coming oil production. It was instructive that the ministry also said in its statement that “as this ministry, along with others, seeks to develop our oil and gas industry in a sustainable and profitable manner, citizens are encouraged to continue to provide their feedback and recommendations on the new sector when the ministry’s outreaches visit their communities.”

This approach will no doubt boost confidence in citizens and allay fears of secrecy and non-transparency. Oil breeds greed and greed breeds corruption. In the absence of strong structures as in laws and an independent judiciary, and government that is uncompromising on the rule of law, corruption can run rife. Such corruption not only occurs within the industry, but also in the wider society, in the corridors of officialdom, and by the self-serving who mask their intent by presenting concern about caring about the management of the wealth.
President David Granger himself during a meeting with ExxonMobil’s executives in March this year had assured them of his Government’s commitment to the development of Guyana’s oil and gas sector in an atmosphere of transparency and trust, so that the parliamentary Opposition and the people of Guyana are fully involved in the process and views the development of a petroleum industry as one of natural interest and involvement.

The President said that it is important that there are regular and accurate announcements on matters pertaining to the development of the sector. “We are committed to the norm of transparency…so that we can move forward at a domestic level, not only in an atmosphere of transparency, but trust, so that all Guyana would see this not as a short-term bonanza; so that Guyanese will see this as a national industry….In this regard, we are walking step by step as the developments take place offshore and the developments in terms of our legislations within our regulatory framework in terms of the passage of information to various stakeholders in Guyana and the diaspora,so that we can create an environment which is stable and secure,” the President had said.

In small developing societies such as ours, it is hard not to find the influencing outlook that attracting foreign investment requires sacrificing preserving the environment and the rights and freedoms of citizens. Exxon is an American multinational oil and gas corporation. The United States and Guyana are signatories to the United Nations’ Climate Change Agreement (2015). Both countries therefore, with the Government of Guyana leading the way, have to ensure extraction, production and distribution are done with the aim of ensuring the committed goal within the agreement of reducing greenhouse gas emissions. Another area where partnership can be solidified is that of ensuring the protection of citizens’ rights and freedoms and the environment in accordance with UN declarations.

Where the Government is pursuing a green economy, ensuring the industry adheres to best practices in sustainable development, protection of the environment, and respecting the local workforce will also boost its developmental thrust.