Latest update March 28th, 2025 6:05 AM
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- “It will be a very bad day for Venezuelan if they attack Guyana or ExxonMobil”—Rubio declares
- Guyana gets info on U.S. tax evasion allegations against Mohameds, Mae Thomas
- US$35 injected into banking system to address foreign currency shortage—VP Jagdeo
- Citizens to stage protest today against lack of access to information in Guyana
- Guyana vows to stand with U.S.
In rush to discover more oil, Guyana exposed to great risks
– Int’l Expert says country must ask itself key questions:
• Do you have the regulatory muscle to manage scale of resources?
• Do you have the legislative framework to protect your interests?
• Do you have the capacity to get maximum value from the value chain?
By Kiana Wilburg
Kaieteur News – To date, Guyana has discovered over nine billion barrels of oil equivalent resources in the Stabroek Block. More significant resources are poised to be unlocked as ExxonMobil continues to drill more holes in the offshore concession.
Dr. Valerie Marcel, Associate Fellow at Chatham House
Complementing its rush to find more crude is its desire to monetise its discoveries just as quickly as possible. In this decade alone, the American oil giant intends to bring into operation, 10 oil ships otherwise called floating, production, storage and offloading (FPSOs) vessels.
But while the rush to find more oil and having several projects pumping oil as quickly as possible is beneficial for its investors and shareholders, one international expert is cautioning Guyana to consider the risks that lie in going at such a fast pace.
During a recent interview on Kaieteur Radio’s programme, Guyana’s Oil and You, Chatham House Associate Fellow and respected industry expert, Dr. Valerie Marcel, said Guyana ought to consider how capable it is in meeting all the needs that come with developing such massive resources.
In this regard, Dr. Marcel said the new oil producer ought to consider whether it has the regulatory and legislative capacity as well as the skill sets required to really get maximum value from its resources while ensuring it is prudently exploited.
Vice President, Dr. Bharrat Jagdeo
Dr. Marcel said, “I think having a fast pace makes Guyana a very attractive place to invest in, especially for companies like Exxon because they can quickly monetise their assets. It reduces risks for them. For countries, it does position them well so that they have high production capacity at a time where there’s still a market for their oil, but it comes with a lot of risks. In terms of, do you have a real capacity to supply and to develop the whole supply chain and give you significant local content in these projects?”
She added, “Also, do you have the institutions with the regulatory muscle to be able to challenge companies and say, ‘Well, we don’t want flaring and you have to slow it down or we’re going to slow down the review of the field development plans to give us time to really rethink what we’re going to do with the associated gas…And the FDP is a huge document to consider because it has significant implications for the country.”
The experts alluded that a number of questions can be asked in the process that would help Guyana truly understand just how capable it is of dealing with the colossal resources it has found.
She insisted that governments do need to take time to consider all the variables and how they have to be handled so as to maximise benefits to the country. She stressed that it is very difficult to achieve that when exploration and development are happening at a fast pace.
The Chatham House Associate Fellow said, “It makes sense for Guyana to slow down. This timeline (for development and exploration is) no one else’s timeline, not the company’s timeline, it is Guyana’s.”
Even though Guyana has been cautioned by several other international experts to slow down its pace of development so that it can have enough time to build its capabilities to manage the sector, the PPP/C Government has proffered a different agenda and mindset. Specifically, Vice President, Dr. Bharrat Jagdeo, has said that the administration is capable of doing both simultaneously. He is of the firm conviction that the administration is more than capable of building the competencies on the legislative and regulatory front to manage the sector while ExxonMobil continues its search for oil, especially in the Stabroek Block.
Since assuming office, the administration has been persistent in its efforts to pursue a robust local content policy which it pledged will be backed by a no-nonsense piece of legislation. It has also taken steps to hire the relevant experts for gas commercialisation and contract management.
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