While Guyana has been blessed with the discovery of over 9 billion barrels of oil equivalent resources thus far, citizens must understand that developing the capabilities to manage such massive wealth is not a sprint says US Analyst Arthur Deakin.
According to the Co-Director of Energy at Americas Market Intelligence (AMI), Guyanese have to be patient with the ongoing development process and have clear goals that will lead towards transparency and accountability in the sector.
Deakin, during a recent interview, stated, “…When there is so much oil being found and there is so much money to be made, I think that everyone gets a little bit frantic and a little bit nervous that things are going to go wrong… You do need to ensure transparency. You need to ensure that the controls are in order to avoid any corruption and mismanagement of resources.”
Deakin added, “But it is something that people must have the patience for. It takes time to develop the oil and gas sector. It takes a lot of hard work; it takes a lot of cooperation between all of the stakeholders and the private sector, between the governments, between the consortiums. It is an ongoing negotiation and development.”
The US analyst said what Guyana has to its advantage is over 10 years of history and precedence that it can learn from. It, therefore, does not have to start from zero like many of the other countries that found oil 20-30 years ago.
Deakin said there are a lot of examples of what has worked and what has not.
“So using that to its advantage can really transform Guyana into a country where the wealth is beneficial to everyone involved,” the Co-Director added.
Expounding further, Deakin said he would recommend that Guyana pays rapt attention to the case of Brazil and Columbia, two of its south American neighbours. In the case of the former, Deakin said the Portuguese speaking nation has had a lot of problems with corruption, especially with Petrobras, its state oil company. Deakin proffered however that Brazil shows examples of what not to do while offering lessons on how to capitalize on the resources it has.
Despite the corruption that has plagued Brazil, Deakin said it is undeniable that it has done a great job in its pre-salt exploration while adding that it exported record amounts to China even though there was a pandemic. “So I think that Brazil has some positives that Guyana can learn from. I wouldn’t say that out’s 100%, bullet-proof model, but there are some things that Guyana can look at from them. Brazil also has a very good regulatory framework and mature framework for its regulatory framework, so that’s another positive development,” he noted.
Although Columbia is a little less in scale and a little bit newer in terms of oil development, Deakin held the view that Colombia is a good country of reference as he noted that it offers lessons on having a sound good regulatory framework and proper controls that allow for responsible spending of the resources that come from natural resources.
