Guyana reviews preparation for oil industry

Oct 31, 2015 News

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Cognizant of the potential risks that lie ahead given the certainty with which Guyana sees its oil and gas sector emerging, Government will not rush foolhardily. Rather, it will be looking to build solid institutional

capacity before looking to tap into its oil resources.
Minister of Governance, Raphael Trotman, gave this reassurance yesterday at the Arthur Chung Convention Centre, when he addressed the opening of a two-day seminar. This seminar is meant to build capacity to manage the nation’s hydrocarbon sector.
“Oil is coming,” according to Trotman, but he reminded that Guyana is not looking to be afflicted with the ‘curse’ that has befell so many nations that would have found their economies benefitting from a sudden increase in resources such as oil.
Partnering with the United Nations Development Fund (UNDP) to host the two day event, Trotman used the opportunity to remind that Guyana must firstly develop a strategy to manage the sector before looking to tap into its benefits.
Also addressing the seminar was UNDP Country Representative, Khadija Musa, who spoke to the potential of Guyana, and sought to point out that Guyana can in fact be the Switzerland of South America, should it be able to effectively manage its potential oil resources
She recalled too, that when United Nations Secretary General Ban Ki Moon recently had a fly over of Guyana, he was quick to point out that Guyana’s Forest was one that needed to be taken care of.
Musa noted too that given the immense resources available to Guyana it is of critical importance to be able to plan ahead. UNDP, she said, is a willing partner.
Governance Minister Raphael Trotman under whose portfolio falls the Natural Resources and Environment sector spoke to the need for a collaborative approach in charting a way forward in relation to managing the nation’s resources.
As such he lauded the presences of the former Natural Resources Minister, Robert Persaud.
Stressing a cautioned approach and its inherent benefits, Minister Trotman spoke to the trend in the oil and gas sector.
Minister Trotman also sought to remind the forum that managing an emerging sector such as oil, requires careful planning.
“Preparation for the development of a full-fledged Hydrocarbon sector will take many years and requires a strengthening of institutional frameworks not only within the natural resources sector but also in the spheres of business services, foreign affairs, the justice and education systems, social protection, and the environment just to name a few,” said Trotman.
“An entire nation has to get on board together and with one plan of action. I ask aloud and rhetorically – will we allow our political differences to divide and diminish our potential once again?”
He observed that as recent oil price fluctuations and its impact have shown, managing a new extractive industry is a major challenge for many of the governments in the developing world.
He said that the past 30 years are replete with examples of Governments that have not adequately developed institutions and regulatory frameworks that allow for an effective functioning of the industry; “including the use of oil and gas revenues to finance policies that are economically conducive to both growth and poverty reduction, or to weather the storms of oil price swings.”
According to Trotman, “those that chose to run through the open door unmindful of the force behind it have paid a heavy price.”
Time can be a friend or foe, he said, depending on “how we utilise it…Guyana will respect time and not rush it.”
He noted a world energy demand growing and projected to be 37 per cent higher in 2035 with India and China accounting for half the growth while in the near future, projections of oil prices suggest an increase from today’s average of US$46 per barrel to an average of US$59 in 2016 and climbing.
According to Trotman, this fact declares that there is room and much benefit for Guyana to not only provide for its energy needs but also to join the energy provision market.
He said, too, that it also raises a number of issues with which the country must treat responsibly such as embracing “a new world order that expects transparency in the management processes and equity in the sharing of natural resources as equally as it demands respect for the environment, and a lessening of global warming and the movement towards the greening of the economy which is an inevitability whose time has come.”
The Governance Minister, sought to assure that the development of the Hydrocarbon sector must be implemented on the basis of the country-specific political and socio-economic context.”

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