Jul 23, 2017 News
By Leonard Gildarie
There are millions and millions of lessons to be learnt from the world over. Singling out the successes and the best practices will have to prove invaluable to our policy makers as we chart the future of this country. Many countries, on their way to development, have fallen time and again but stood up and continued their steady plod onwards.
We are preparing for oil and the world is looking on with curiousity and envy.
An estimated two billion barrels of oil is confirmed sitting in ExxonMobil’s concessions offshore Guyana and waiting to be exploited.
Guyana badly wants to capitalise. It has signed a production agreement which is for two percent royalty and a 50/50 share of the profits. There is deep worry over that share arrangement, as Guyana is estimated to only collect, at today’s prices, over $7B in royalties annually…a dent in our national budget which this year was $250B.
Of course, ExxonMobil is not here for fun. It will naturally want to maintain the bottom line—profit. Guyana’s find is being hailed as a major one, at a time when prices are low and green energy is seriously becoming a force to be reckoned with.
ExxonMobil has a reported history of playing hardball, leaving some of the countries they operated in what is said to be a worse situation.
In the last century, oil has been the cause of wars and the downfall of quite a few economies. Venezuela is a prime example. Trinidad and Tobago, too, is facing tough times, with foreign currency low, but analysts believe that the situation is temporary as the country corrects itself.
After a tough year of work, I decided to take the family on vacation to the Twin Island Republic, as T&T is known. I had stayed over in the past, but only on working visits and in-transit.
Without a doubt, it is a must-see for all Guyanese. T&T is truly an amazing country with a rich history that is steeped in pride and patriotism.
Its famous ‘doubles’, made from channa and a kind of puri with sauces, are a proud breakfast tradition. It gave the world Brian Lara and Nicki Minaj and has kept the chutney and soca music tradition alive. Let us not dwell on its world famous Carnival.
But for the first-time visitor, T&T’s infrastructure would be the most immediate and compelling thing to take note of. Piarco airport rivals some of the world’s best, complete with jet bridges.
T&T’s road network, with overhead passes, and breathtaking beaches, along with the presence of some of the world’s top hotels like the Hyatt and Hilton, are but part of the lure.
I lost count of the number of malls on the island, some of them rivaling even those in New York. Its heritage sites like the San Fernando hilltop, with its hewn rocks, and Mount St. Benedict, have been drawing thousands of visitors annually.
As I marveled at the strides this little country- of just over 1.3M persons, and 1800 square miles, (Guyana is 45 times larger), I kept hearing last week how good we have it in Guyana.
T&T is not worried so much about the state of the economy. However, there is a deep, deep fear over the crime rate.
In 2016, the murder tally was over 470. This year, the murder rate continues to worry, with some of the criminals clearly showing a disregard for the police.
The killings are drug- and gang-related, with kidnappings, robberies, human trafficking and even a rampant trade in body parts (organs), said to be fueling the situation.
US reports have indicated that last year alone, more than 81 percent of the murders were from the use of firearms.
I was warned several times by family and friends to be careful. We traveled in groups and visited crowded areas like the malls.
In some of the areas, families were being warned to keep children close because of kidnappings. The workers even use special stamps for the family to ensure that the children you are leaving with are not being kidnapped.
There are some areas like the famous Laventille where cops are afraid to venture into.
I even heard of cases where the cops seem to be in league with the drug traffickers and criminals. They would give them guns and drugs to sell.
Families are fearful of stepping out. There were news reports last week of foreign nationals being targeted, with studies showing at least 100 criminal gangs existing.
I could not help but ponder on the ironies, in context of the Guyana situation, where the fixation of the crime situation overwhelms worry over jobs and trade.
T&T has done well for itself. It has a 100 years head-start on Guyana with regards to oil. It has evolved from mere oil production to becoming a key player in the production of natural gas.
Visit the port areas, where many of the plants are located. The production refineries are dizzying. Downstream activities have grown and are now textbook examples.
Trinidad and Tobago houses one of the largest natural gas processing facilities in the Western Hemisphere. The electricity sector is fueled entirely by natural gas. Trinidad Generation Unlimited power plant, the second combined cycle plant in the country, with a generating capacity of 720MW, was opened on October 31, 2013.
With 11 ammonia plants and seven methanol plants, Trinidad and Tobago was the world’s largest exporter of ammonia and the second largest exporter of methanol in 2013, according to IHS Global Insight.
Trinidad has tourism and oil. But it has managed to attract some major investments like Nestle and is a major producer of fertiliser, cement, and an array of popular foods that are stacked on the supermarket shelves in Guyana.
T&T is said to be the wealthiest country in the Caribbean as well as the third richest country by GDP (PPP) per capita in the Americas after the United States and Canada. The country’s wealth is attributed to its large reserves and exploitation of oil and natural gas.
The twin island has been attracting like crazy, investments in liquefied natural gas (LNG), petrochemicals, and steel.
T&T, despite the oil, managed to expand to develop a strong manufacturing base, supplying its goods aggressively to the region. While it is the leading Caribbean producer of oil and gas, and its economy is heavily dependent upon these resources, it also supplies manufactured goods.
Significantly, oil and gas account for about 40% of GDP and 80% of exports, but only 5% of employment.
I spoke to quite a number of T&T oil officials last week, including some government officials.
Guyana has a few choices. Because of pre-existing agreements, the country now has little options with regards to altering the ExxonMobil deal, except appealing to the company’s corporate and social responsibilities.
Guyana does not immediately boast an envious array of oil experts. We would do well to insist that Exxon and any new companies that come in, invest in specialised degree courses, engineering included, helping the country to widen the scope of the labour force.
We have quite a few blocks offshore remaining for concessions. Any new exploration company will have to be tied down to agreeing to at least 70 percent of the work force being local, and the use of services right from Guyana.
I was told of another worrying development. There is technology for unmanned rigs offshore. Trinidad boasts of a few of them.
We should not be banking too much on the windfall from oil now. Rather the emphasis should be building local capacity and ensuring we plan long-term. We need to tap into Trinidad. There is much to learn from this little CARICOM state which has capitalised on its opportunities.
The milk has been spilt, but ExxonMobil I am convinced will not be flinching from any suggestions to sit down and help up improve our capacity.
Trinidad, as I said, has had a 100-year head-start. Can we do better in 25 years?
This is where some tough decisions will have to be made for this country.
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