WHAT DO RISING POLITICAL TENSIONS MEAN?


Political tensions in Guyana took a turn for the worst over the past two weeks. This has resulted from the appointment by President Granger of former Justice James Patterson as Chairman of the Elections Commission. Claiming that the third set of names contained no one who was fit and proper as required by the Constitution, the President, rejecting the names, utilized the constitutional proviso that enabled him to appoint a judge or former judge or a person qualified to be a judge.

Mr. James Patterson may not have been the President’s first choice. The appearance of Major General (ret’d) Joe Singh’s name among the final six gave some hope that the matter would be resolved without resort to the proviso. Those who know the retired Major-General suggest that he would not have allowed his name to go forward if there was any possibility that it would be rejected as not fit and proper. His sudden resignation from all government posts suggest that an undertaking, which may have been given to him, had been violated.

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THE PETROLEUM COMMISSION


Very little debate has taken place on the Petroleum Commission of Guyana Bill. It is to the credit of the Georgetown Chamber of Commerce to have initiated a public discourse on the legislation around the country, albeit late in the day. The lead speaker has been former Energy Minister of Trinidad and Tobago, Kevin Ramnarine, who has tremendous expertise in many aspects of the oil industry and who has visited Guyana several times sharing his knowledge. He was ably assisted by Mr. Deodat Indar, the president of the Georgetown Chamber of Commerce, which has been invigorated in recent years by many young business leaders who are dedicated to its agenda of promoting business and commerce.

The business community is deeply interested in the Bill because it seeks to establish the institutions that will oversee the oil industry and to define the rules which would guide their functions and duties. Since it is likely that when passed, the Bill will impact the business community by providing opportunities for its growth and development for decades in the future, it is vital that not only business, but the people of Guyana, take an interest in what is being proposed to maximize the potential for Guyana.

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OIL AND SOME OF ITS CONSEQUENCES


Three of the four dailies on Friday headlined the second oil find by ExxonMobil at a well called Payara-1. Past predictions about the presence of petroleum deposits in off-shore Guyana were confirmed when ExxonMobil’s announced its world class discovery, the largest for 2016, at its Liza well. If the Payara-1 turns out to be large, then the predictions of much greater deposits in the area could be accurate and much more oil could be found.

The amount of petroleum deposits that have already been found is enough to transform Guyana. But somehow Guyanese do not yet appear to be impressed. Casual conversations with Guyanese suggest that the cynicism that has developed from decades of promises based on Guyana’s agricultural potential, that Guyana could become the bread basket of the Caribbean and Guyana’s failure to take off economically, continues to exist. When told about the prospect of oil wealth for Guyana, and what it could mean for the future, many Guyanese are dismissive and unbelieving.
The truth is that Guyana would be transformed and we need to choose how. It would not happen overnight, of course, but by 2025 Guyanese would be feeling the impact of the oil income, which would continually increase. The Government appears to be making preparations to establish the legal framework and institutional mechanisms. There is no evidence that it is making any effort to reach out to the Opposition to build consensus from the earliest stage. If the Government wants political and national consensus going forward, it needs to start consultations with the Opposition early or face the possibility of a perennially contentious situation for our oil industry. Former Minister of Energy of Trinidad and Tobago, Kevin Ramnarine, speaking in Guyana recently, urged the establishment of a national oil and gas company to manage the oil industry, whose leadership should be insulated from politics. While this is easier said than done, it can be accomplished if the effort starts now.

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GUYANA’S FUTURE AS AN OIL PRODUCER


The official information is that Guyana’s petroleum deposits are estimated to be equivalent to 800 million to 1.4 billion barrels of oil from the results of two wells. Many more wells are expected to be drilled by Exxon in the future and no one knows how much more oil, if any, would be discovered. The US Geological Surveys has long estimated that Guyana’s offshore reserves are between 15 and 30 billion barrels.

With increasing exploration activities, if anything close to the lower figure of 15 billion barrels are discovered, for most Guyanese the future would be beyond contemplation. With reserves of only between 800 million and 1.4 billion barrels, poverty would be eliminated in a short period and Guyana per capita income of US$3,600 would rise rapidly.

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