Guyana’s future bright with oil & gas – Greenidge

…says public support necessary for strengthening institutions

While criticism continues regarding the management of Guyana’s oil and gas sector, Economist Carl Greenidge, who served on the local content panel that the People’s Progressive Party (PPP) Government set up, believes that Guyana’s future will be a bright one with the sector.

Carl Greenidge

In a recent interview with a local radio station, Greenidge, a former Finance and Foreign Affairs Minister, who now serves as Advisor on Borders in the Foreign Affairs Ministry, was asked for his opinion on the sector.
Greenidge had a message for the naysayers and those critical of Guyana’s oil production at a time when the country is also trying to go green. He declared Guyana’s future is bright, and those oil resources must be developed in order for Guyana to reach its true potential.
“From where I sit, and as an economist, I believe that Guyana’s future is bright. Whether it is petroleum or gold or diamonds, or daffodils or chrysanthemums, any asset or resource that you have which generates a lot of income requires that it be properly managed. So, the so-called curses don’t arise from the product, they arise from how you manage it.
“And if you start off believing that you should not exploit petroleum because the rest of the world is blighted by it…you’re not going to get very far. Our task is not to exploit resources, but to ensure that these resources, which are public goods, are managed collectively.”
Greenidge also noted the importance of developing institutions that can adequately manage the oil sector. According to him, building capacity benefits from the public buy-in, and is undermined not only by the politicians, but also the permeation of “doom and gloom.”
“The types of strengthening of our institutions to which you make reference, are undermined in part by the attitude of the public and the public’s voices, as well as the inadequacy of politicians,” he said. “So, you identify an institution to be reformed. Somebody is appointed to the institution with a mandate not to do anything, and you don’t get the product you want. There is therefore no silver bullet.
“We have to address these problems at all the different levels at which they arrive. It is not only a problem of politicians”.
Guyana, with oil giant ExxonMobil as operator, began producing oil on December 20, 2019 in the Stabroek block, lifting its first million barrels of profit oil from the Liza-1 well in February 2020. Oil tanker Cap Phillippe transported this lift from the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel, allowing Guyana to receive its first payment the next month.
That money, GY$11.4 billion, constituted Guyana’s first oil revenue-based earnings from production in the Liza field. It was deposited in the Federal Reserve Bank of New York in March of that year.
An additional sum of G$7.3 billion was subsequently deposited, as well as royalty payments. However, this money has remained untouched, as the protracted political crisis that followed the March 2nd General and Regional Elections sabotaged any attempt to set up a system for withdrawing funds.
The Natural Resource Fund Act stipulates that various committees must be established to provide oversight for the fund. It is expected that this legislation will be reviewed by the current Government this year.
When it comes to building capacity, the Government has also set its sights on setting up a Petroleum Commission that would manage the sector, while building capacity at the Guyana Revenue Authority (GRA) to audit the oil companies drilling offshore Guyana. (G3)