Guyana’s depletion policy was crafted to suit global supply and demand – Jagdeo

May 25, 2025 News

---

-Says Govt. long-term policies aren’t determined by day-to-day changes

Kaieteur News- Vice President (VP) Bharrat Jagdeo on Thursday told the media that Guyana’s depletion policy was crafted to suit the global supply and demand.

Jagdeo made the statement at his weekly press conference held at Freedom House, Georgetown. He made it clear that long-term policies are not determined by day-to-day changes.

Kaieteur News asked the Vice President whether it is considering putting a depletion policy in place to existing frameworks to manage and strengthen the oil sector, thereby ensuring maximum benefits for citizens.

“Should we have a depletion policy now… you don’t determine policies of a long-term nature on the basis of daily occurrences in an oil and gas market which is known for its volatility, and so when I saw that comment coming from Jordan [Winston Jordon- former Finance Minister] I wonder if he really understood policy,” Jagdeo said.

Former Minister of Finance Winston Jordan in a May 5, 2025 article captioned, ‘Govt. should hedge, implement depletion policy in face of dropping oil prices – Jordan’ published in the Stabroek News said that with unpredictable oil prices and the International Monetary Fund’s (IMF) projections of lowering prices for crude this year the government’s ‘drill baby drill’ policy is flawed and a depletion strategy is needed.

In the article, Jordan opined that it is not too late to implement a depletion policy. “The more FPSOs [Floating Production and Storage and Offloading vessels] ExxonMobil brings on, it is with these additional costs,” Jordan told Stabroek News.

“And if you are now extracting more and more oil and at a less and less price, it will take longer to pay back Exxon’s [operational] costs. And in that, our dream of getting a better profit share will be like what Bob Marley said, ‘a fleeting illusion,’” Stabroek News quoted Jordan as saying.

Jordan said that he has listened to the government and especially Vice President Bharrat Jagdeo that the policy is to extract as much oil as possible as the timeframe for fossils is dwindling and operational costs are lowest now.

However, Jagdeo a former President and finance minister said that the type of policy that Jordan spoke about would have to be altered as oil prices fluctuate.

“The depletion policy that we have now was carefully calibrated to take account of what’s happening globally, with the demand for and the supply of crude to the global market. Now the overarching agreement to go to more sustainable sources of energy will cause a major reduction in demand for fossil fuel related supplies. In the short term this may not be so but in the longer term this will happen. We’ve already seen evidence of this taking place in the transport sector,” Jagdeo assured reporters.

He noted that the three largest sources of carbon emissions are burning fossil fuel for power generation, using fossil fuel for transportation and the land degradation and deforestation. When combined they account for nearly over 90% of all emissions. Citing that the transportation industry is headed towards electric vehicles, Jagdeo added that a depletion policy has to also take that environment into account.

“I don’t see anybody talking about that as the driving factor behind a depletion policy, because if you don’t get your crude out of the ground, and transfer it or monetize it, or your gas out and monetize it, and invest or save your financial resources to be utilized for the prosperity of the country quickly you run the risk of being stranded…your crude being stranded in the ground because, there’s several other countries that are competing with you and never being able to monetize it if that future happens faster than we think,” the VP stated.

Jagdeo noted that the future is a decarbonized one while stating that the government is more focused on getting the crude out of the ground as fast as possible and transforming it into financial resources.

Given his statement that Guyana has a depletion policy in place, Kaieteur News attempted to seek clarity from him about the policy. Messages were sent to both Jagdeo and Minister of Natural Resources Vickram Bharrat seeking a copy of the policy. However, up to press time, no response was received.

Meanwhile, in August 2022, this publication reported that since assuming office, the Peoples Progressive Party Civic (PPP/C) Government has taken the decision to not make use of the Inter-American Development Bank’s depletion policy guidelines for oil resources in its entirety.

Vice President, Bharrat Jagdeo and President, Irfaan Ali have argued that they want ExxonMobil and partners to accelerate oil production in the Stabroek Block. Both have articulated to the citizenry that Guyana has a short window within which it can get the most bucks for its oil barrels as the world will look to rely more on renewable energy sources to a significant degree by 2050.

Industry stakeholders have however disagreed with this approach, stating that Guyana’s sweet, light, crude will be needed beyond 2050, and therefore, authorities would do well to implement a depletion policy to pace itself. Local activists have also argued that Guyana should have a policy in place to give itself breathing space to build the necessary skills and capacities to manage the sector; otherwise, the risks are even greater for economic loss as well as environmental damage.

The government has disagreed with the foregoing arguments, contending that its approach is in the best interest of the country.

---

• depletion policy, global, Jagdeo, oil and gas industry, Supply

---