The government must break its silence on oil and gas

Oct 27, 2019 Features / Columnists, My Column

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For the past few years, I was walking with one impression of the oil and gas sector, that it will create jobs and that it will open up new horizons for the country.
I was also going around looking at the influx of Trinidadians with some concern. I was of the view that they were taking jobs from Guyanese. I failed to realise that many Guyanese, in the first instance, did not know where to start to capitalise on the oil and gas sector.
I also realised that the entire country was looking to the government for help and direction. Many were already critical of the oil contract signed with ExxonMobil without realising the conditions that led to the signing.
I learnt that Guyana became the oil discovery it now is by a stroke of luck and a decision taken by one of the partners in the ExxonMobil group. Prior to 1997, there were oil companies in the country looking here and there for oil but finding none.
Shell refused to be part of just one more exploration and sold its share in Exxon for a dollar. Exxon continued to seek financing because it had spent a large sum of money on previous explorations. Even the parent company refused to fund the operations. That is how Hess and the Chinese company, CNOOC became the consortium to be so involved.
They identified two areas for drilling on condition that if they hit one more dry hole they would walk. Hess managed to convince its partners to ignore the first hole and to drill the second. Bingo.
Had they drilled the first hole, as it turned out, they would have come up empty handed. Guyana would have never known that it had so much oil. Either the hand of God or luck has placed Guyana in the enviable position it is in.
The next big influence on the industry came from the hand of President David Granger. In many countries, the oil contract is secret. Granger decided that there must be no secrecy; that the contract must be made public.
It turned out that his decision caused so much criticism of his government that people who professed to be experts saw the government as bumbling idiots. They did not know half of the story although Exxon attempted to tell the world that it never had to sign the second contract. The first contract was enough. All it had to do was ramp up its production schedule and make a fortune at Guyana’s expense.
This past week, I was exposed to so much information that even now I am trying to process some of it. Guyana is setting up entities and agencies as it is learning about the industry. It is tightening loopholes in the laws and the contracts that it has already signed.
Even more, it is allowing people with knowledge of the industry to come in and help Guyana make its baby steps. This is where the Trinidadians come in.
Trinidad has been in the oil industry for more than a hundred years. Its people have never seen the oil contract that country signed with British Petroleum. They learnt by trial and error and they are now bringing their skills to Guyana, taking some Guyanese along with them.
I am not sure that the government has reached out to Trinidad for the experts that country has. They have knowledge that we need; they speak the same language and they share our cultural heritage. They will never be as ruthless as those from further afield and they will come cheaper.
At present, Trinidadians are pushing Guyana’s local content. They came with their money and they are the beneficiaries of programmes that Exxon needs.
For its part, our businessmen are simply sitting down and waiting for something to happen. Some of the areas of local content need capital to develop. I was told that if our businessmen could form a consortium they would be so better placed that Guyana would really capitalize on local content.
Sad to say, each businessman is an island, trying to do things alone but not having enough money to scale the summit. Two weeks ago some were complaining that they were in no position to offer Exxon the ninety days credit limit; that they had loans to repay.
Imagine a larger pool of money from the consortium. That credit limit would have been no problem.
Then there is the silence on the part of the government. The nation is not being kept abreast of the developments the government shares with Exxon. In addition to aiding with the confusion, the people simply do not know where they stand.
Information is on the web but not many people know where to look and what to look for. Exxon is not keen on press conferences. It feels that the government has a right to inform people and to answer questions.
As for the jobs, I know that most of them will come from the spinoffs from the oil industry. Hotels are booming, there is transportation but apart from those who have capitalized on the movement from Ogle not many know where to go.
Carnegie School of Home Economics is churning out operatives for the oil industry because people must eat. Graduates are being gobbled up but the same cannot be said for the technical institutes, which must produce skilled artisans. I am not sure that money from the oil sector is going into this area.
I am not even sure that we have the people to train the students in areas that are needed. So Exxon is bringing in people who are taking jobs that should be going to Guyanese.
And so we come to the acquisition of shares in the oil sector. It is time the government set up an oil commission and an oil company in which Guyanese can buy shares.
At present, the focus is on oil but Guyana has an amazing amount of natural gas that can do wonders for the country. The oil company is not interested in the gas so this is an area that Guyana can make money. Exxon has already said that it can bring the gas to shore.
Whether Guyana is pursuing gas turbines for electricity generation is not known. If there is not enough money then local investors can provide the funding and earn handily from their shares in that company.
We may not have the technology or the skilled people but these are available next door. We are in a race against time and the government must make known its intention in this area. We are lagging and there is money to be made.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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