Latest update January 18th, 2025 6:31 AM
Six years later, Guyana has almost zero institutional, human capacity to manage oil industry
– Situation benefits oil companies, harms the country – Dr. Mangal
International Petroleum Consultant, Dr. Jan Mangal
Kaieteur News – Having found oil since May 2015, Guyana finds itself in a position today where it has almost zero institutional and human capacity to manage the growing industry. Sadly, such a conundrum only benefits oil companies and harms the country. Expressing these sentiments recently was former Presidential Advisor and International Petroleum Consultant, Dr. Jan Mangal. On his LinkedIn Platform, Dr. Mangal said he shared this perspective with the Inter-American Dialogue (IAD). The organisation had asked the consultant to say, if he believes a new auction system for oil blocks would improve Guyana’s industry.
Dr. Mangal was keen to note that transparent auctions are the best way for countries to benefit from their natural resources. He noted however, that Guyana is a clear example of how one can forfeit massive wealth by avoiding transparent processes for the disposal of state assets. In this regard, he was referring to the Kaieteur and Canje Blocks that were awarded by the Donald Ramotar administration, mere weeks before the 2015 General and Regional Elections.
“If these two blocks had been auctioned instead after the Stabroek announcement (in May that there was oil), Guyana could have garnered a much larger share of the revenue,” expressed the former Presidential Advisor.
Although the future award of blocks should be via auctions, Dr. Mangal told IAD that there are strong arguments not to award any more blocks. He said many would challenge the need for Guyana to produce more and more oil when this has a clear impact on global warming.
Dr. Mangal asserted that Guyana needs to focus on increasing its share of revenue from the Stabroek block, instead of trying to produce more oil in other offshore concessions. He said the same goes for the Canje and Kaieteur blocks. He said these awards can be rescinded and the blocks properly auctioned off, thereby increasing Guyana’s revenue without needing to produce more oil from new blocks.
Dr. Mangal said, “The objective is not to produce as much oil as possible, but to get a fair share of what is produced, to produce a prudent volume (considering tradeoffs such as climate change) and to ensure the revenue is not squandered…”
To complement this, the International Consultant said, Guyana would need much more than a petroleum commission. He said it would also need a comprehensive framework, with new bills, laws, policies, regulations and associated institutions. Unfortunately, the country remains relatively miles away from getting all of these safeguards in place by yearend.
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