-US Ambassador

It’s very possible for Guyana to grow simultaneously as a ‘green’ state and a well-recognised petroleum producer should the country move briskly ahead in developing and finalising certain regulatory frameworks.

Leaving a few wise words behind on the topic, outgoing US Ambassador to Guyana Perry Holloway last Tuesday spoke to the media on Guyana’s approaching possibilities and measures it must take to ensure sustainability. Guyana first discovered oil in May 2015 and as recent as last week, oil company ExxonMobil updated its estimates of recoverable oil-equivalent in the Stabroek block offshore Guyana to 5 billion barrels.

“You’re going to have this big amount of money coming in and then you can decide what you want to do with it. You want to turn the whole country solar or hydro? You can do it,” Ambassador Holloway began.
He then asked: “Right now, what’s the challenge of implementing a full green state economy, making every house solar? It’s money. That’s the problem. So it gets even easier as the more money you have, the easier it is to do it.”

However, it simply being easy is not enough to make it happen, as the Ambassador stressed that much will need to be in place between now and first oil, set for March 2020.
“This will be about the fastest any country has ever discovered oil, deep water oil, and produced it basically in less than five years. That’s the fastest it’s ever been done in history. So this is moving very fast.

“I do commend the Government for taking a lot of steps, they are moving in the right direction but this is very fast so as it accelerates, the Government of course is going to need to accelerate its activities if they want to keep up with the pace of things,” he advised.

The draft legislation to establish Guyana’s Sovereign Wealth Fund (SWF) needed to manage in the spending of oil revenues is expected to be placed before the National Assembly before December according to Finance Minister, Winston Jordan.

Meanwhile, the World Bank is assisting in the redrafting of the Petroleum Commission Bill; a Ministry of Petroleum is likely for 2020; the Department of Energy is drafting new model Production Sharing Agreements (PSAs) for future contracts and the University of Guyana (UG), along with twelve other educational agencies, is working to provided higher education in oil and gas related fields.

Added to this, hundreds of Guyanese businesses are being trained to improve their standards and are gradually joining the supply chain for ExxonMobil and its prime contractors while

“Guyana’s got to get its regulatory environment straight, they’re working on it; they have passed some laws; they created a Department of Energy; they need to figure out —- however they’re going to do whatever it’s called whether it’s a Sovereign Wealth Fund, a Rainy-day Fund, a Green Fund — when the money comes in how do you manage it for the good of the future,” the Ambassador advised.

He added that while a number of models exist for the management of resources, the ones he has noticed work best are those structured to be applicable to successive Governments. “You put this thing, as much as you can, on auto-pilot so no matter if you’re the president this week and next week [someone else] is the President, much of what has been planned and decided upon continues to move forward and no one can change it easily,” he cautioned.

“It’s not to say you can’t change it, you do need flexibility if you’re a government [because] things happen you couldn’t plan for like your politics change, but you need to make it as not controlled by one or two individuals but controlled by guidelines and priorities as much as possible.”

Holloway also gave his opinion on which areas he believes the money should be spent in, which he noted was similar to the ideals of President David Granger.
The key areas for investment he singled out were education, health, security, agriculture and infrastructure.
“There’s going to be money to spend on 10 priorities if you have 10. The amount of money will not be Guyana’s problem, it’s how you spend it and how do you spend it well,” he said.

Another area recently up for discussion by environmentalists, international specialists and politicians and the country’s citizens in general, has been that of the mechanisms in place to deal with an oil spill.

The release of such liquid petroleum hydrocarbon into the environment oftentimes mainly affects the marine ecosystem.
On the topic, Holloway said that while everyone should be concerned about a possible oil spill, it’s very infrequently in the industry with ExxonMobil being one of the most safety-conscious oil company to-date.

Nonetheless, the noted that the universal understanding is that in the case of an oil spill, the operator has the responsibility for clearing it up.
“I think Guyana is lucky in the sense that you do have one of the largest operators in the world with the most knowledge…ExxonMobil, they’re probably the most safety-conscious that I’ve ever visited or seen.

They’re very concerned about safety,” the Ambassador said.
He continued: “Guyana should be preparing itself to be able to– if one were to occur –understand the terminology and provide guidance to the operators because either way pretty soon in Guyana I suspect they’ll be more than one operator.”

Earlier this year the Civil Defence Commission’s (CDC’s) hosted an Oil Spill Response Training exercise for 35 representatives from government and private agencies while local fishermen could soon receive hands-on training in oil spill response. At the same time, Guyana’s National Oil Spill Contingency Plan is in its draft stage with ExxonMobil forming a part of the National Oil Spill Committee working along with the CDC and other stakeholders.

Apart from these preparations and precautions, Ambassador Holloway, in continuing his string of advice, reminded that petroleum is a non-renewable resource which means that Guyana should remain firm on its vision of a sustainable, green economy.

“Guyana will not be an oil producing country forever, no one knows how long it’s going to last. You see [the predictions] of 20-30 years, I suspect it will be longer because there’s more to be discovered, it seems, but there will come a time when oil is not the answer.
“You have countries like Venezuela which still has more oil than any country in the world and people are starving; they’re going through the jungle of Region One to come to Guyana. So, oil is not an answer to everything,” he notified.

However, this still is no reason for Guyanese, though they may be cautious about a number of uncertainties, to fall into a state of pessimism or despondency. The Ambassador stated: “I hear a lot of doom and gloom about a lot of things in Guyana, but I understand. There have been a lot of people who say ‘we had gold, we didn’t really benefit that much; we had bauxite, we didn’t benefit that much’, [that’s] all true but this is so much bigger than gold or bauxite or anything. This is a monstrous amount of oil and a large amount of money.

“What I tell the doom-and-gloomers is it’s good to be cautious but you should [also] try as much as one can as a single citizen –and I know they’re limits in every country — to hold your government’s feet to the fire; try to get as smart as you can on the subject and get ready for it. It’s going to be a rising tide that I think will raise all ships.”