Suriname in no rush to pump out oil, while Guyana govt. says ‘Pump, baby, pump!’

Feb 15, 2021 News

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By Mikaila Prince
Kaieteur News- Cognizant of the imminent threat of climate change, countries across the globe are heightening their response by moving away from fossil fuels and transitioning to cleaner energy. In hopes of capitalizin

g on what some call a “narrow window”, oil-producing countries like Guyana are looking to pump as much oil out of the ground as possible.

Suriname, however, shares a contrary view on the matter. In fact, Rudolf Elias, the Chief Executive Officer (CEO) and Managing Director of Suriname’s state oil company

, Staatsolie, believes that oil will be in the energy mix for decades to come, so there is no need to pump all of it out of the ground as fast as possible.

Elias shared these and other critical points during his debut appearance on the Kaieteur Radio programme Guyana’s Oil &You, on February 4.

There, the Oil Boss was asked whether Suriname’s Staatsolie had any intentions of getting all the oil out of the ground as quickly as possible, and whether it felt as though the country was caught in “narrow window”.

While pointing out that the topic is a “sensitive” one and that he advocates for the preservation of Suriname’s biodiversity, Elias believes that oil will be in the energy mix in the coming 100 years. He went on to indicate that the demand for oil will reduce and estimates that between 2030 and 2050, the world will see a peak demand.

“But the energy demand will keep going up” he says, “so that means that there will be more and more renewables in there and we [Suriname and Guyana] should also look at the renewables and start investing in them… One of the big things that we should look at together is our biodiversity and be able to say, ‘Let’s preserve that biodiversity for future generations’ because that natural resource will never go out like oil, bauxite, gold or one of our natural resources that we have.”

Notwithstanding this, Elias reminds that the cost for Guyana and Suriname to produce its high-quality oil is very low, “so we will be in the energy mix for the coming 100 years. I am not worried about that,” he adds.

In Guyana’s case, however, the People’s Progressive Party/ Civic (PPP/C) government says it wants to steam ahead with aggressive production. Notably, when the PPP/C had assumed office in August last, Kaieteur News had published a list of 20 things, which the new government must do to set the oil industry on the right path; a path that would allow the nation to build its capabilities to properly govern and monetize the resources. High on that list was the creation of a depletion policy. In simple terms, this strategy would say how fast or slow Guyana must extract its oil resources.

Several local, regional and international stakeholders have appealed for the nation to have a policy that slows the aggressive rate of extraction by ExxonMobil; otherwise, the country would be left extremely overwhelmed and on a dangerous precipice.

Taking this into account, Vice President, Dr. Bharrat Jagdeo was asked in November 2020, during one of his press

conferences, to state the government’s interest in implementing a policy that would slow the rate of extraction.

At that time, the Vice President did not give any commitment or guarantee that the government would be inclined to walk that route. Dr. Jagdeo did state, however, that his personal view is that there should be aggressive oil production.

Weeks later, Guyanese, who have yet to be consulted on this critical matter, would learn that Jagdeo’s personal position has become the bedrock of what the PPP/C’s depletion policy for the nation would be. That policy for the time being says –“Drill baby drill!”

During an interview on Kaieteur Radio on December 23, 2020, the official had said that Kaieteur News has often reported that the PPP/C is yet to define a depletion policy. He stressed, however, that the government has already done so “anecdotally.”

The Vice President had said, “My own view is that we have a period in which oil would still be very relevant in the global mix of energy and we have a period but it is a window that is closing because of climate change. The window for Guyana will be open a little longer for us than other countries because we have low breakeven costs and because our crude is sweet, light unlike others which have heavy or sour crude.”

The Vice President also noted that the recently issued regulations by the International Maritime Organization require the removal of 80 percent of the sulphur content from global shipping. Since heavy or heavy sour oil has a lot of sulphur, “everyone is looking for sweet crude now.”

Further to this, Jagdeo pointed to the fact that the world’s leading economies, China and the USA, have made it pellucid that they will be heading to renewable. In fact, China, the world’s biggest energy consumer, aims to achieve carbon-neutrality before 2060. As for the USA, President-elect Joe Biden has declared intentions to increase the nation’s switch to renewable energy.

Considering the implications of climate change and the global transition to cleaner energy sources, Jagdeo posited that demand for fossil fuel is either going to be static or declining in 15 to 20 years’ time. He said that this is what has influenced the PPP/C’s position to extract the oil as quickly as possible, use portions of it to build world class infrastructure and education while putting aside some for inter-generational equity.

 

 

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