Aug 04, 2022 News
– to brief business community today
By Kiana Wilburg
Kaieteur News – With Guyana’s oil development moving at industry-leading pace, consultancy groups are making their way to these shores to deliver lofty sermons about how much money the Stabroek Block barrels are projected to make. Most of these groups however, avoid any analysis about the dangers Guyana faces with the industry, or even how much more she could have benefitted from a better contract with ExxonMobil.
Rystad Energy out of Norway is one such group that is here to present an intricate web of forecasts about Guyana’s oil earnings to come. By 2040, it believes Guyana’s oil barrels will rake in approximately US$157M. Given the sweet, light properties of the country’s premium black substance, the world market will need it for decades to come. These two are key points that will be unveiled to the business community this evening by Rystad Energy.
Senior Vice President & Head of Latin America for Rystad, Schreiner Parker is expected to make the full scale presentation on the Guyana whitepaper at Duke Lodge. Prior to this engagement, an executive summary of the document was presented to selected members of the media at Oil NOW’s Spurwing Drive office.
There, Parker provided some of the main points of his Whitepaper which focuses on how much Guyana stands to make and the advantageous positioning and ranking she will have in the years to come. The Senior VP said Guyana will go from a frontier exploration country to a top five global offshore oil producer in the next decade and this is not including latest two discoveries in the Stabroek Block (Seabob-1 and Kiru-Kiru-1).
Expounding further, he noted that Guyana has been leading in the offshore discovery space since 2015 with 11.2 billion barrels of oil equivalent which account for 18 percent of the resources discovered worldwide and 32 percent of discovered oil.
With current developments and the production trajectory for the Stabroek Block, the Rystad official said the consultancy group forecasts the country will move up to 1.5M barrels a day by 2035 which means Guyana will be the number four offshore producer and ahead of provinces like Mexico, USA, the UK and Norway.
Further, Parker said Guyana represents material growth for government and oil companies, with revenues for government projected to reach US$7.5B per year by 2030 and amount to a cumulative US$157 by 2040. Parker was keen to highlight that his company believes the low cost of production and low emissions intensity of Guyana’s barrels leave it armed with a “future-proof” basin.
In closing his presentation, Parker said he believes Guyana is taking steps to implement best governance practices in order to harness the oil and gas revenues for broader economic development. He said these key steps have manifested in the form of the Natural Resource Fund (NRF) and the Local Content Law along with membership to the Extractive Industries Transparency Initiative (EITI).
Kaieteur News, during the Question and Answer Segment, was keen to point out however that it does not agree with the picture painted by Rystad. The newspaper’s journalist stressed that the increased production of barrels and the revenues they earn do not automatically translate into transformational wealth for the people as seen with the case of Angola and Nigeria. Both nations are the two largest producers of oil in the African continent yet, they are fraught with extreme poverty and corruption.
As for the NRF and Local Content Law, Kaieteur News highlighted that there are countries which are armed with both of these mechanisms yet, corruption persists and the true beneficiaries of the wealth are unable to improve their standard of living. With respect to the Local Content Law which came into being in December 2021, the government is currently battling against foreign entities which are trying to circumvent the intent and spirit of the law on ensuring Guyanese have at least 51 percent ownership and make up a large part of the management team. Government, even at this early stage, is also forced to fight off foreign companies from renting citizens to appear as though they are meeting the requirements of the law. Complaints were also registered yesterday by the Georgetown Chamber of Commerce and Industry (GCCI) that they continue to lose opportunities to participate in the sector with the bundling of contracts by other oil companies.
As for Guyana’s membership to the Extractive Industries Transparency Initiative, Kaieteur News registered its disagreement that this mechanism means the country is able to properly manage the sector. In the EITI reports Guyana has published, none of the recommendations for improvements in revenue reporting have been adhered to; and importantly, it has done nothing to date to bring about greater transparency and accountability in the oil sector.
To date, Guyana is still without an independent regulator for the oil and gas sector in the form of a Petroleum Commission, the petroleum laws remain outdated, and production reports on the Stabroek Block have not been made public despite numerous promises by the Ali-led administration.
Publisher of Kaieteur Newspaper, Glenn Lall, upon listening to a recording of the meeting also expressed disgust with the messaging of the Rystad Group as he said it is indicative of the kind of toxic indoctrination that follows from certain lobbyists when the independent media endeavour to educate the public about the realities of the sector. Lall said Rystad and Exxon’s propaganda on who really stands to benefit from the offshore resources, are the same.
Lall said, “Guyana still has a far way to go. Kaieteur News has been at the forefront of ringing the warning bells. We have shown how countries like Nigeria, Angola, Uganda, all lost billions of dollars earned from their oil and gas while their people wallow in poverty. Guyana is still struggling to put the fundamentals in place but Rystad wants to fool the people of this nation that we are on the right track.”
The KN Publisher said he is of the firm conviction that Rystad is here to paint a one -sided picture of Guyana’s oil story. “It is deceptive, to say the least. But I will break down this propaganda in a subsequent show on one of my radio programmes.”
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