Jamaicans urged to go after opportunities in oil-rich Guyana

Jun 25, 2024 News

Jamaica Gleaner – As Guyana scrambles to make the most of its oil wealth, Senator Aubyn Hill, minister of industry, investment and commerce, is again urging local entrepreneurs to invest in the Caribbean Community (CARICOM) nation.

Senator Aubyn Hill, minister of industry, investment and commerce

On Thursday during the media launch of Smart Mobile Solutions’ (SMS) Smart Tech 360, held at The Jamaica Pegasus hotel in New Kingston, Hill specified why Jamaican entrepreneurs should consider investing in this out-of-country opportunity.

Over the past decade, Guyana has found huge amounts of oil and gas under its coastal waters. That country now boasts reserves of about 11 billion barrels, which puts it in the top 20 in terms of its potential, on a par with countries such as Norway, Brazil and Algeria. The small country, which borders Venezuela, Brazil and Suriname in South America’s north-east region, also boasts the fastest-growing economy in the world.

A consortium led by ExxonMobil discovered the first major oil deposits in May 2015, more than 100 miles (190 kilometres) off Guyana. However, the quest for petroleum offshore Guyana began in 1958 when California Oil Company conducted seismic surveys before withdrawing in 1960.

Hill believes the time is right for Jamaicans to invest in Guyana although the oil discoveries come as the planet is trying to wean itself off fossil fuels to tackle climate change. Under the 2015 Paris Agreement countries have vowed to reduce their greenhouse gas emissions to net zero by 2050, which means trying to cut down on oil use.

“I don’t take trade missions. I take business missions. I take business people to do business… We took 61 to Guyana, back again to Guyana three times. Listen mi nuh, I spent 21 years in the Arab Gulf, where oil is. I’ve seen what happen to countries when they become an oil economy. Listen to me carefully, continue to invest in Jamaica, build your company, but we have such a fantastic relationship with Guyana, we paid the respect over the years, they have respected us. We have three million people. They have 780,000 people. Jamaica has a stock market that works. We have government systems that work, whether you believe they’re at the top or not. They’ve worked very well in many cases,” Hill said.

“And so Jamaica must form a consistent and symbiotic relationship with Guyana to make sure, as their economy grows on the back of 11 billion barrels of oil declared, and I’m sure there are probably more, as Suriname grows its economy with one billion barrels of oil declared, Jamaica works with these companies,” he said.

Hill continued to highlight that Guyana has its Georgetown port and other ports in Suriname and, in five to seven years, he predicts that Guyana will expand its port as did Singapore and Dubai. “But, between now, four to seven years, there’s a lot to be done … I have taken seven [to] eight trade missions around the Caribbean, United States, Canada, Britain and France and when I started in Guyana in October 2022, there were six ICT companies with us. We had 35 business people who paid their fares, paid their hotel, paid their food and were with us,” he said.

Pool resources

He also encouraged Jamaicans to pool their resources, if they have to, and invest in Guyana as groups.

“Go and find partners. We have whole heap of money in this country. For seven [to] eight years, we stayed out of the capital markets as a Government, making sure there’s money in there for the private sector to have. Get the private sector [and] come together in a group … But really and truly, there is money, but come together and form consortiums. One of the best inventions of western capitalism, is something called the limited liability company; when him and him join and make a limited liability company, you can’t go tek weh dem house, unless dem sign a personal guarantee,” Hill said.

“It is limited. The limited liability allows you to get money … Put a company together and out of that combination, come something that is stronger than if you do it alone,” he said.

In January 2023, Hill led a 60-member delegation from Jamaica to Guyana to strengthen previously established partnerships with Guyanese businesses, as well as increase trade and investment opportunities between the two countries.

Guyana, a country with a land area of 214,969 square km or 83,000 square miles, is the third-smallest sovereign state by area in mainland South America after Uruguay and Suriname. In 2022, Guyana ranked 80th in total exports at $18.5 billion but, although it does not have Economic Complexity Index data, in that same year Jamaica ranked 72nd in the Economic Complexity Index (ECI -0.17) and 145th in total exports at $1.95 billion.

Highest growth in the world

Guyana has emerged as a significant contributor to growth in the global supply of crude oil. Since starting production in 2019, Guyana has increased its crude oil production to 645,000 barrels per day (b/d) as of early 2024, all from the Stabroek block. Guyana increased crude oil production by an annual average of 98,000 b/d from 2020 to 2023, making it the third-fastest growing non-OPEC producing country during this period. Crude oil production has been the largest contributor to Guyana’s economic growth in recent years. In 2022, Guyana’s GDP grew by 62.3 per cent, the highest real GDP growth in the world that year, according to the International Monetary Fund.

While Guyana’s most recent estimate of recoverable oil and natural gas resources is more than 11 billion oil-equivalent barrels, developers are still exploring the country’s offshore waters. The country’s discovered oil and natural gas resources are currently located offshore within the Guyana-Suriname Basin of the Atlantic Ocean. Guyana’s oil production comes from three floating production, storage, and offloading (FPSO) vessels: Liza Destiny, Liza Unity, and Prosperity. These vessels produce oil and natural gas from the Liza and Payara projects. All associated natural gas is reinjected into wells to support its production and used as on-site fuel. A proposed project would bring associated natural gas onshore to processing facilities via pipeline.

Currently, the block’s partners plan for the combined production capacity to reach approximately 1.3 million b/d by the end of 2027, with plans to develop three additional projects: Yellowtail, Uaru, and Whiptail. If realised, the increased production would make Guyana the second-largest crude oil producer in Central America and South America behind Brazil.

• CARICOM, Guyana, investment and commerce, minister of industry, Senator Aubyn Hill