Dear Editor,
There is a block-wide ring fence on the Stabroek Block, and the benefits to Guyana, Guyanese and our economy continue to accrue; yet many persist in calling for ring-fencing within the Stabroek Block, despite the negatives such a provision would impose.
Lallbachan ‘Chris’ Ram called on ExxonMobil Guyana Limited (EMGL), the operator of the Stabroek Block, to inform the nation of how much revenue it has lost due to the lack of a ring-fencing provision. This is the wrong question for the wrong entity. The right question is: ‘How much does Guyana gain from keeping the ring-fencing provision block-wide, instead of individual wells?’ and the people who should answer are the Government.
In the meantime, here are some facts we should consider.
There is a ring-fence around the entire Stabroek Block, which allows for continuous exploration and appraisal. This, in turn, has led to the discovery of over thirty wells with commercial potential. This has led to a lighting move from first discovery in May 2015 to ‘first oil’ production in December 2019. Guyana’s current production level is over 600,000 barrels of oil per DAY! It is expected to grow well past a million BPD and upwards, it is the reason we are the fastest-growing economy in the world.
Make no mistake, Guyana sits in the catbird seat, we are the envy of the entire world. The recent Bluefin discovery is another in a long line of successful wells drilled; and with each well, our pie grows ever larger. Such is the bounty in the Stabroek Block that Guyanese have become inured to discoveries, I can find no fault with the Government’s “drill and produce as much as possible” policies, we are rapidly approaching the limit of absorption capacity of oil revenues, and we have just begun to roll.
Any move to standalone ring-fencing would slow this momentum. This would affect Guyana more than Exxon and partners, for whom it is a matter of zeros on the bottom line. For Guyana, it is the development of our infrastructure (roads, bridges, power stations, schools, hospitals, police stations); jobs/business opportunities for our people; cheaper power, a higher standard of living for all Guyanese; and it can’t come soon enough for all of us.
It is this haste to develop that drives the wrong questions. Some feel that oil revenues automatically translate into socialism, so they preach to all who will listen that the oil money is not being distributed equally; that there should be no blackouts, no potholes, everyone could just stay at home and get a cheque every month. This combination of populism and socialism is a road to ruin. A look at our neighbour to the West is but the most recent in a long line of populist socialism failures. The Government’s policy of infrastructure, education, vocational training, and opportunity is far more sensible; it is sad when those who should know better tout the populist line instead of honest development. Chris Ram is right when he says we should all become ‘oil minded’; where he is wrong is when he thinks we should all be of like mind with his socialist outlook.
To answer the ‘right’ question, Guyana has gained immensely from the discovery of oil, the block-wide ring fence has allowed ease of investment decision that sees more wells being drilled, and our reserves are over 11 billion barrels and rising fast. Exxon and the Stabroek Block partners are moving ahead with production capacity, which benefits Guyana and Guyanese. Our underground resource is being converted to finance, and that finance is driving our development, and it can’t happen fast enough for us. A project-by-project ring fence would be an application of brakes in mid-flight, and cause unnecessary turbulence on what has been a smooth supersonic flight to date.
Let’s not stop the progress or conjure negative vibes with the wrong questions. In the words of Bing Cosby “don’t fence me in.”
Sincerely,
Robin Singh
