Energy experts warn: Oil wealth alone won’t secure Guyana’s future without strict fiscal discipline

Feb 18, 2026 News

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(Kaieteur News) – As Guyana barrels deeper into its oil and gas era, regional and international energy finance experts are cautioning that petroleum riches, by themselves, will not guarantee long-term prosperity.

Instead, they say, the country must exercise strict fiscal discipline, strengthen governance systems and carefully manage how oil revenues are spent, or risk falling into the same traps that have plagued other resource-rich nations.

Those warnings were sounded on Tuesday during a project financing panel at the Guyana Energy Conference 2026, held at the Guyana Marriott Hotel Georgetown.

The panel, led by energy consultant Ignacio Rooney of Wood Mackenzie, featured Aleshia Duncan of the United States Department of Energy; Jorge Ordonez, Director of Sustainable Finance Global Sovereign Solutions at Citi; O’Reilly Lewis, Director of Projects at the Caribbean Development Bank; and Josh Loftus, Director of the EY Energy Markets Group at EY.

Speaking remotely on fiscal discipline, Ordonez warned that rapid oil expansion, particularly in emerging producers like Guyana can significantly increase fiscal risks if governments do not maintain a firm grip on production forecasts, expected revenues and price volatility.

“They have to have robust investment and risk management policies and checks and balances that foster accountability and transparency at the fiscal level,” Ordonez said. He stressed that governments must maintain a clear view of oil production levels and projected earnings, while enforcing spending discipline backed by a credible fiscal rule.

He explained that such a rule could be anchored to a non-oil fiscal deficit target, cautious debt levels or spending limits. However, he cautioned that having a rule on paper is not enough.

“The rule is only as good as you can keep it,” he stated, underscoring the need for political commitment at the highest levels to enforce and sustain it.

Ordonez further argued that oil-producing countries must limit how much petroleum revenue flows directly into the national budget, while prioritizing long-term capital investments over short-term consumption.

“When governments have strong fiscal and governance frameworks that guarantee disciplined and transparent management of oil wealth, it becomes an opportunity,” he said. Sovereign wealth funds, he noted, can help ring-fence revenues to build savings, stabilize budgets and support essential spending.

Without such discipline, he warned, oil wealth can drive debt accumulation, inflationary pressures and economic instability. Rating agencies and investors, he added, closely monitor debt sustainability, fiscal buffers, institutional strength and economic diversification before determining whether oil production represents an opportunity or a risk.

Meanwhile, Duncan pointed to Guyana’s rapid production growth, driven by ExxonMobil, which could see output reach approximately 1.3 million barrels per day by 2027, placing the country among the world’s fastest-growing oil producers.

However, she cautioned that such explosive growth can trigger mixed reactions from credit rating agencies and investors if not matched by strong governance frameworks.

“That opportunity to grow not only the economy, but strengthen the economic infrastructure, really yields a unique point in time,” Duncan said. She emphasized that disciplined management of oil revenues can send positive signals about bankability, attract private financing and strengthen public-private partnerships.

The discussion also turned to the wider Caribbean, with panelists highlighting the need for stronger regional energy integration.

Lewis underscored the potential of submarine cable interconnections to link electricity grids across the region, reduce energy costs and improve energy security. He explained that such projects require technical feasibility studies, regulatory harmonization, transaction structuring and risk mitigation measures to make them commercially viable.

He also pointed to geothermal energy as a major opportunity, particularly if regional grid integration improves project economics and attracts investors.

Ordonez added that sustainable debt instruments could support economic diversification while reducing dependence on oil revenues. Such bonds, he said, can be structured to finance infrastructure, renewable energy and social development projects in education, health and housing, while also strengthening transparency and accountability through stricter reporting requirements.

Gas a strategic opportunity

As the session drew to a close, natural gas was identified as a key strategic opportunity for Guyana and the wider Caribbean.

Loftus said gas development could support petrochemical industries, domestic power generation and even export markets, including liquefied natural gas (LNG). However, he stressed that early policy clarity on gas utilization, long-term supply contracts and creditworthy counterparties will be critical to securing investor confidence.

Panelists also highlighted ongoing efforts by the Caribbean Development Bank to strengthen governments’ capacity to plan, structure and manage large-scale sustainable energy projects.

In summarising the discussion, the panelist emphasized that while Guyana’s production continues to surge, experts warned that long-term economic security will depend on disciplined financial management, strong institutions and strategic regional cooperation.

Without those safeguards, they cautioned, the country risks squandering a once-in-a-lifetime opportunity.

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• Energy experts, fiscal discipline, Guyana Oil, Oil and Gas, oil wealth

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