Home Letters Courage, vision of JJ and BJ: Guyana now officially an oil-producing country
According to a release from ExxonMobil and a statement from the Energy Department, Guyana, as of December 20, 2019, is now officially an oil-producing country. This is a proud moment for all Guyanese. This is a moment that can transform our country, bringing socio-economic benefits for all Guyanese. The possibilities are endless. In spite of many misgivings, oil is undoubtedly good for Guyana. In spite of serious concerns, Exxon and the big oil companies flocking to Guyana are good for our country. There is no sure thing, but oil places Guyana in a position to propel itself into a high middle-income country immediately and the talk of being a developed country is no longer utopian rhetoric. Sure, oil by itself is not going to make these possibilities real. Many other things will have to fall in place, but Guyana has its best shot of achieving its “El Dorado” destiny at this very moment. We will either grab the opportunity and seize the possibilities or we will damn ourselves.
We did not reach this fork in the road by accident. We got here because two momentous decisions were made in the last two decades. The first was made by Janet Jagan (JJ). When JJ agreed to solicit and encourage big oil to explore seriously in Guyana’s waters, it was a decision she made against her own lifetime distrust of big oil and big multinational corporation. But she was convinced that among Guyana’s natural resources was an oil resource and she persuaded herself that only big oil could confirm that such a resource existed. Her own ideology and make-up, her own determination that Guyana must own and benefit from its resources made it difficult for a decision to provide enough incentives for big oil to be interested.
I know. After dealing with her Cabinet and her party executives, she often talked to me about her concerns and misgivings. But in the end, she made a decision, difficult for her, but one she had to make in the interest of Guyana. Many commentators, some of whom today are basking in the glory of oil, denounced and blasted her decision. After oil findings were confirmed beginning in March 2015, these same commentators were ugly in denouncing the exploration agreements, condemning the concessions provided to Exxon and big oil. But without the exploration agreements in 1999 and what some considered as generous incentives, Guyana would not have been an official oil-producing country today.
The second momentous decision that contributed to Guyana today being an oil-producing country is the decision made by Bharat Jagdeo (BJ) after Suriname attacked with its gunboats an oil exploration team from CGX in the deep sea in 2002. The then President BJ decided in April 2004, with total backing from his Cabinet, to approach the International Tribunal on the Laws of the Sea under the UNCLOS treaty for a decision to confirm Guyana’s maritime borders in Guyana’s EEZ (Exclusive Economic Zone), using the formula of the Laws of the Seas. The laws and the treaty agreed to by virtually all countries, including Guyana and Suriname, under the UNCLOS, determined how rights in the seas and oceans and national EEZs are determined. Guyana was always convinced that our borders and rights to the seas and our EEZ were in accordance with the UNCLOS laws and agreements. Suriname sought to interpret those laws differently to expand its rights to maritime hydrocarbon resources.
It was a difficult decision to place our destiny in the hands of an international court, but Bharat Jagdeo displayed the courage and the vision necessary to do so. He chose legal recourse over a military confrontation. This decision built on the platform JJ created by issuing exploration agreements with big oil. Guyana won that case when the International Tribunal ruled in 2007 and the opportunities to explore for hydrocarbons exploded. The decision to approach the International Tribunal was not based only on the Suriname attack on CGX, it was based on decades of Suriname refusing to honour mutual agreements on the use of the sea by the two countries. The approach to the international court was a risky one and many commentators had misgivings. In the end, Guyana won that case and removed all uncertainties for exploration in Guyana’s seas.
Some will argue that the 2004 approach to the international judiciary and its 2007 decision have nothing to do with the Exxon exploration and discovery because the Exxon fields are well away from the limits of Guyana’s EEZ. But the UNCLOS approach demonstrated that Guyana and her leaders had the courage to defend itself and its resources and this provided confidence for the big investors to explore knowing that Guyana will not be cowered into not issuing exploration and production licenses.
For those who think it is impossible for our politicians to work together, consider this. In 2004, when BJ announced Guyana was going to the International Tribunal of the UNCLOS, the then PNC gave unconditional support, even if privately some expressed doubts. When Guyana, through the APNU/AFC Government, approached the ICJ to defend the integrity of our borders with Venezuela, the Opposition PPP declared unconditional support. There is still hope that our politicians can work together for the benefit of Guyana.
These two courageous and visionary decisions play a pivotal role in Guyana finally joining the ranks of oil-producing countries. Other persons played a role. President Donald Ramotar provided support and encouragement during the initial exploration drills that finally led to the April 2015 confirmation that oil was present in commercial levels in Guyana. The transformation of the exploration agreements into production agreements was eventually signed in 2016 by President Granger. Mistakes have been made, but Guyana is now an oil-producing country.
On paper, Guyana is about to become one of the richest countries in the world. Our GDP is about to almost double from about US$4500 to more than US$9000 per capita and overall from about US$5 billion to almost US$10 billion annually. Transparent and accountable management of the oil resources can lead to socio-economic transformation. Those in charge of these resources now must acknowledge we begin life as an oil-producing country with some serious missteps which have to be corrected. Those who will be in charge in the future must be guided by the principle that oil resources must reach the most vulnerable in our country. While international oil companies are sure to get richer, Guyana must ensure all of our people benefit meaningfully from oil and not only a handful. It is times like these when the courage and vision of those who made this happen must be acknowledged. In this regard, the two momentous decisions by JJ and BJ have brought us to this transformative moment.
Dr Leslie Ramsammy