GUYANA is set to produce an approximate 10 billion barrels of oil equivalent. This places the country in a position in the coming years to be a major player on the international stage. It is envisaged that by 2035, Guyana could be among the top 15 oil producing nations in the world.
This is exciting news. The challenge for Guyana, however, is to get the oil on the international market within the shortest possible time and in a safe and environmentally-friendly manner. Oil, as we know, is a non-renewable resource and it is also exhaustive. What that meant in effect is that as a commodity it cannot wait forever to be exploited and marketed. There is a limited window of opportunity, which, if not taken advantage of, could result in the underutilisation of an extremely valuable and marketable resource.
There are some who argue that ‘oil don’t spoil’ and on the basis of that flawed logic, they argue that there is no need to rush into drilling. The truth is that oil does have a risk of ‘spoiling’ if left unharvested for too long a period, especially in the new dispensation where the world is moving in the direction of non-fossil and renewable forms of energy.
New oil producing nations with huge carbon deposits such as Guyana and Suriname cannot sit idly by and allow such resources to remain dormant. That would be tantamount to an economic ‘crime’, especially when seen against the background of historically-induced levels of dependency, underdevelopment and poverty which had characterised several of these nations during colonial and post-colonial rule.
All of that is now about to change for the better. Already 20.2 million barrels of oil has already been produced in the first half of this year, an increase of 64.5 per cent for the corresponding period last year. That amount is 4.1 per cent higher than the set target of 120,000 barrels per day for the first quarter of 2021.
No less significant is the fact that price of oil on the world market has been on the rise due to an increase in demand on the world market. Guyana, with its superior quality and relatively low-cost producer of oil stands to gain immensely from oil revenues which could make a world of a difference in terms of the quality of life of the Guyanese people. Guyana now has a reputation not only as an emerging player on the oil market, but also as a supplier of light sweet, low sulfur content oil which makes it a strong competitor for market share.
Why then should Guyana be made a sacrificial lamb in the bigger scheme of things as they relate to climate mitigation measures? As pointed out by Vice-President, Dr. Bharrat Jagdeo, the use of fossil-based fuel is not expected to disappear any time soon, and it would be in the country’s best interest to take advantage of that window of opportunity to enhance the economic well-being of the Guyanese people.
The other point worthy of consideration is that that there is no indication, at least at this moment in time, of any scaling down of oil production by the bigger oil producing nations which continue to rake in billions in profits. Nor is there major progress made in terms of energy alternatives to the fossil-based fuels which meant that the demand for oil will continue to remain high well into the foreseeable future.
The fact is that as a country we are blessed with some of the world’s most lucrative offshore oil fields. It is for us now to produce them in an environment that is becoming much more carbon-sensitive to a point where there are calls in some places for there to be an end to drilling operations. Guyana and other newly emerged oil producers stand to lose the most in such a scenario. Investments in the oil drilling business are highly capital intensive and involves the most sophisticated use of production technology, the returns to which can only be optimised with maximum output spread over a number of years.
This does not in any way imply that production should be done at any cost, certainly not at the cost of our environment. The PPP/C administration is fully committed to a low carbon development strategy and it is that strategy that will be the guiding policy in terms of the exploitation of our resources, especially in the oil and gas sector.
Oil, without doubt, is big business worth an approximate four trillion dollars. Guyana is well positioned to receive a substantial share of that money. And as pointed by Dr. Jagdeo, the Guyanese people have a legitimate expectation to have a share in the oil bounty that has helped so many nations and peoples to graduate out of poverty to higher levels of prosperity.
Our per capita income still remains low even by regional standards and it is only fair that as a country we market our resources to the maximum of our potential in an environmentally- friendly and sustainable manner. The government has already begun to put in place policies and regulations to ensure that the development of the oil sector is done in a safe, low carbon way in order to reduce carbon emissions to acceptable levels.