Today Guyana has oil. There is now talk about preserving the riches that should accrue from the discoveries made by ExxonMobil.
Yet a few short years ago, the oil would not have been Guyana’s. We seem to forget that foresight by a now dead leader has some people going wild and others being critical of decisions made so far with regard to the oil.
It was not so long ago that Guyana’s territorial limit extended a mere three miles offshore. That was the case when Guyana became independent. It was also so for many Caribbean countries, not least among them Trinidad and Barbados.
At the time Forbes Burnham was the leader of Guyana. He opted to examine the United Nations rule as it relates to territorial limits. He found that Guyana could extend its own and moved to move the territorial limit to twelve miles.
To put this in perspective, one only needs to remember the Cubana air disaster of 1976. When the aircraft exploded off the coast of Barbados, Guyana pushed to have Barbados try the criminals. But Barbados claimed that the aircraft came down outside Barbados’ territorial limit. That limit was a mere three miles.
Burnham argued otherwise to no avail. In the end, because the criminals were Venezuelan nationals, that country prosecuted the men.
Not long after, Barbados extended its territorial limit to twelve miles. A little too late for Guyana. Meanwhile Guyana continued to look at its territorial limit. Burnham then explored the law as it related to the Exclusive Economic Zone (EEZ). He found that Guyana could claim up to 200 miles off its coast.
This was in keeping with the United Nations Convention on the Law of the Sea. That convention states, “the UNCLOS (Part V) defines the EEZ as a zone beyond and adjacent to the territorial sea in which a coastal state has: sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil, and with regard to other activities for the economic exploitation and exploration of the zone, such as the production of energy from the water, currents, and winds; jurisdiction with regard to the establishment and use of artificial islands, installations, and structures; marine scientific research; the protection and preservation of the marine environment; the outer limit of the exclusive economic zone shall not exceed 200 nautical miles from the baselines from which the breadth of the territorial sea is measured”.
Burnham was a clever man and a nationalist. He secured those 200 nautical miles so that today Guyana can claim the oil that has been found offshore.
Now that there is oil, so many things have happened. For starters, there is the pre-oil cost being levied by the oil company. These costs must be audited because there is the view that they have been padded. The higher the cost, the less money Guyana will get for its oil.
Of course, the whole question of oil is new to Guyana. We have been pursuing oil for decades and finding little or nothing. I remember back in 1973 when a company, Home Oil, made a discovery in the Takutu Basin. The find was put at 800 barrels a day.
Needless to say, Guyana was excited. But alas, that oil was not in commercial quantities. Our hopes of becoming an oil-producing nation were dashed. The well was plugged and remains so to this day.
But today, there is so much more, to the point that Guyana is counting in thousands of barrels per day. With the find, too, Guyana has introduced the study of oil and gas at its leading institutions.
Sadly, enough Guyanese are not benefiting from the offshoot. Trinidad with is knowledge, having been in the industry for more than 100 years, is capitalizing on the offers in Guyana. Trinidad nationals are the major beneficiaries of the local content.
Guyanese with their money have always been reluctant investors. It would have been a master stroke of some of them, if they had the knowledge and the drive to invest in some of the things that the Trinidadians have come to do.
Even so, Guyana feels that it is still being short changed. The pressure for greater local content was recently met with the comment that Guyana wants to be at the same level as Trinidad in this area when the neighbouring country had years to perfect its position.
The fact is that Guyana can and should aspire to be where it wants to be, because it must. The faster a country develops some things, the better for its people. Guyana already has a vibrant agricultural sector. It can supply all the food needs for ExxonMobil, and it should. The oil company therefore has no need to import food and to ask Guyana to pay for it.
The audit conducted by Guyana should look at the extent of food imports and raise objections. Housing should have been another area. Instead, we understand that the oil company is establishing its own housing. It has the money to do so.
One argument would be that it is using local skills to construct these homes. However, that raises another question. There are many countries that deny foreigners the right to own property in the country. Guyana with its small population and its dire need for investors never pursued such a law.
I do know that the oil company is renting hotel rooms across the city at Guyana’s expense. Will the gambling debts incurred by the occupants be included in the bill forwarded to Guyana?
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