Our oil is still out there

Jan 14, 2018 Countryman, Features / Columnists

By Dennis Nichols

I hope to be alive in 2020; in fact I’ll do my best to ensure it.

The ‘year of oil’ and a most crucial election round, will be one for the books, and I want to be a part of it, if only to chronicle the making of history. But now I also want to reflect on some of the less material aspects of what is seen as Guyana’s biggest economic boom exploding in that watershed year. I want to understand more about how trillions of bits of subterranean fossilized organic matter become the stuff which makes and breaks people and nations, and which could transform our country into a great or a grotesque nation, or both. It has happened before.

Some people may imagine that oil and retrospection don’t mix well; once the flow begins who has time to look at the big, and I mean really big, picture, that started to be drawn a long, long time ago according to geoscientists. Many do, and I’m one of them. We are interested in the continuum of life, death, and regeneration and how we advanced humans relate to tiny animals and plants that lived and died millions of years ago, and which, under continuous heat and pressure, were transformed into the smelly, yellow-black liquid called crude oil, and natural gas. We also want to understand, (or try to) how it is that something so great and transformative as an oil discovery, could end up having a largely negative effect on a country like ours.

The experts theorize and tell us that these plants and animals after dying, accumulated in swamps, ocean floors, and river beds, and mixed with sediments from sand, silt, and clay which formed sedimentary rocks, before undergoing chemical change. There is also a theory that claims it may have had an inorganic source when the elements carbon and hydrogen fused under great heat and pressure deep below Earth’s surface to become oil and gas.

Then there is the creationist view which uses the biblical Genesis flood to account for the origin of oil from the ‘catastrophic sedimentation’ that occurred during the divine deluge. In any case, the original source of the energy transferred from plants to animals and thus found in all organisms, without which they could not exist, is our sun – oil’s indirect source. That’s how big the continuum is, little Guyana. And believe it, some scientists are still unsure as to exactly how oil and gas are formed.

As I had mentioned in a previous article, the knowledge of how oil and natural gas are formed, where their reservoirs are located, and how they are extracted from Earth’s crust, are not subjects that most Guyanese would have been much interested in prior to 2015. Even now, many of us are more concerned with how the expected post-2020 windfall (Or should it be gush-up) will affect our pockets and our lifestyle, and we should be. Who wouldn’t want our own version of the 1928 American Republican Party ad promising ‘A chicken in every pot and a car in every garage’? But shouldn’t we be equally concerned about our seeming inability to get the best possible deal with that monster corporation called ExxonMobil? What about two chickens in every pot …?

Then of course there are the scary ‘Dutch Disease’ predictions, or at least warnings. I do not understand many of the complexities of oil deals, contracts, and long-term viability, but I do feel in my gut, like many others, that the persons who negotiated on behalf of Guyana may have been at a distinct disadvantage relative to their counterparts across the table, and some experts seem to think so.

Many have been the warnings, and I consider especially those by local analysts like Christopher Ram and the more philosophical insights of someone like Ian McDonald, both of whom have implied that we should tread, and exhale, with caution. The much clamoured-for contract is not a crystal ball, the oil is still buried beneath the blue in distant Atlantic waters, and the anticipated billions are at present as illusory as El Dorado.

You know, I can’t help but be bemused by the fact that Guyana’s oil-and-gas is located and bedded so far from our shores, and so deep, that it almost seems like something alien we should hesitate in claiming as ours. (But it is, so back off Venezuela; in any case it’s farther from you than it is from us)

For most Guyanese the Stabroek Block is still only a name; a dream; a title for a title deed to property that is unseen, and virtually unknown. It’s not like the rice, sugar, bauxite, gold, and timber that we can see and touch, and harvest with our own hands and tools; we have to depend on foreign hands and devices. There is a mind-boggling difference between a dredge and an oil rig, and yellow gold is not black gold.

As for the cash and other benefits that will accrue to Guyana from oil and gas, some of us are befuddled by the conflicting views and assertions from our politicians, economists, and business people, and by the words coming out of the mouths of Exxon officials, implying we have little to worry about. Words – since 2015, tens of thousands of words in a mélange of fact and opinion, semantics, and what someone termed ‘industrial lingo’. I don’t know if any of us truly understands the big picture as well as the bottom line in what all those words mean and imply. For example, could a market glut, an oil spill, a submarine earthquake, or a price plunge radically change the landscape/dreamscape, and precisely how?

Well, money talks too! And that ‘small’ $18 million (US) bonus is not chump change – $3.6 billion in local currency. One economist suggested however that it fell short by about, oh, a couple hundred million US, and what’s a little G$44 billion between soon-to-be friends? Okay, give me a fraction of one per cent of it and I’ll show you, with my own version of ‘green’ development!

I like how our Private Sector Commission sees the deal. They want a piece of the pie also, not only for themselves, they say, but for the general populace of Guyana, who ‘deserve to benefit directly from the abundance of oil at its disposal’. Very fine sentiments toward poor people’s development, and theirs. They say they are looking forward to future agreements for other blocks offshore, but don’t want just any ordinary negotiators for future contracts. They want ‘world class’ agents representing Guyana’s interests. I agree; we can certainly learn something from such savvy folk after what has so far been described as a debacle. Let’s hope the negotiators on both sides have some empathy for less savvy Guyanese.

My final point may seem a curious one. Can we have too much oil? I almost feel sad for some of our regional neighbours, because we seem to be rapidly outdistancing them in the push to prosperity, especially since the latest, and most impressive ‘Ranger’ discovery. In all likelihood there’s more, and if things go well, I hope our generosity as a people doesn’t diminish in inverse proportion.

But I need to remind myself, and we need to keep this thought at the back of our minds for the next two years or so. The oil and gas in the Stabroek block is bountiful, and has the potential to super-positively transform every Guyanese life. But two years aren’t two days, and, for all it’s vast potential, it’s still out there – way out!