GLOBAL energy markets continuing to be severely disrupted seven months after the Ukraine war started and Europe decided to wean itself of Russian gas. Every indication is the fighting will continue longer than can be predicted, while the world’s richest nations face unprecedented inflation ahead of a biting global recession and poor nations pay highest prices, especially for food and fuel. Europe is trying hard to secure energy supplies ahead of possibly its worst winter in four decades. The global oil market is both full and emptying, as producers protect prices and anxious businesses and consumers line up to fill their tanks and boost reserves. This series examines some of Guyana’s options at home, regionally and on the world market — as the world’s latest and fastest-growing emerging oil producer — today and tomorrow, ahead of the Final Quarter of the 21st Year of Century 21.
A lady friend who normally needles my brain with penetrating questions was at it again on Monday night, when she called to discuss ‘Things That Matter Today’ (theme for our almost-daily conversations). And this is how it went…
SHE: With its budget expanding by almost 50 per cent annually and oil reserves in the billions of gallons, when will the Guyana government start caring and sharing about the rest of CARICOM?’
ME: What’s your hurry? The Guyana government is only two years old…
SHE: What they waiting for? Another COVID? Or another set of hurricanes? Guyana is building-back its highways and bridges quickly and they’re about to construct a whole new Smart City, so why not also start helping us with our main problems in the Caribbean too?
ME: How?
SHE: They can give each island an annual donation, alongside a long-term interest-free loan, like how the Chinese are doing with their ‘Belt & Road’ deal.
ME: Guyana’s oil and gas is still very much below the ocean floor and what’s being extracted is still very small by total estimates.
SHE: All the more reason for them to be more generous to us, who welcomed Guyanese with open arms when things were bad with them.
ME: You behaving like you want Guyana to become CARICOM’s ATM…
SHE: No, I am only asking them to lead the way in construction of a new CARICOM, with an in-house partner that can better understand our needs than America, Britain, Japan and China. All I’m saying is, I hope Guyana learns from Trinidad and Tobago and Guyanese don’t go about flashing oil dollars in our faces tomorrow, like the Trinis did back then, when (Prime Minister Dr) Eric Williams made the very big mistake of saying ‘Oil can’t spoil…’
ME: That was about 50 years ago, but a barrel of oil was already worth US $140 and Trinidad & Tobago was truly swimming in money. But even today, the world market price per barrel is nowhere near that, so Guyana isn’t making that amount of money in the new norm.
SHE: But given the volatility in the oil market today, with the US even getting vex with Saudi Arabia for joining OPEC and Russia to raise energy prices, is Guyana ready to tap that market?
ME: I suspect Exxon-Mobil and Hess will first sell every barrel they can to the US, but if Guyana’s oil is to be sold on the European market, I suspect it will be the oil companies making the deals — and paying the taxes to Guyana. But Guyana is in the oil business for dollars and not cents and I don’t see this administration playing politics with oil, or ‘weaponising’ its gas, as they say now.
SHE: But Guyana must also guard against oil theft… BBC just reported last weekend the Nigeria national oil company has only now discovered, after nine years, there was an illegal pipeline in its production machinery selling oil on high seas.
ME: That is a nautical version of highway robbery, but I am sure that while Guyana is a rookie on the global oil block, it’s grown-up tough in a rough neighbourhood and I don’t see this government rolling over to be walked upon, or closing its eyes to the experiences of others, which are reported in real time by today’s mainstream and social media… I’d rather think they are quietly, even silently, taking notes and getting ready to do those things that will allow Guyana to continue to carefully milk its new cash cow instead of hurrying the job and risk kicking the bucket, or spoiling the milk.
SHE: But back to my earlier question… When will Guyana start giving us a helping hand?
ME: Guyana has shown its willingness to help. Some wrongfully claim ‘only Barbados’ is getting help, but it seems to me Barbados is formally seeking and arranging co-operation and assistance faster than other CARICOM states. Just check how many times Prime Minister Mottley has been to Guyana in the past year, to attend multilateral conferences and sign agreements. I think it’s we who are moving by turtle pace and communicating by snail mail while Trinidad & Tobago, Barbados and Jamaica move faster. It’s we who have to move faster…
SHE: From what I see, the government seems to be using the money well and spreading it far and wide across Guyana, but I hope, for our sakes, they are putting something aside to help us…
ME: Guyana is taking a ‘Dollars and Sense’ approach to its oil and gas future and I have no doubt good sense will prevail in its management of taxpayers’ money. But again, as to be expected in the economics of Caribbean politics, ‘Charity must begin at home…’ And in that regard, I feel this Guyana government has been more than just charitable.
SHE: ‘Yeah? Let’s hope you don’t choke on their oil and gas promises.
ME: If I do, you’ll surely be glad to give me a big glass of water – and remind me later.