The IMF estimates that Guyana will be the fastest-growing economy in the world in 2020, with projected growth of 84% for 2020 – up from 4.4% in 2019. The jump in growth is attributed to the fact it began oil production in December 2019. Guyana is looking to tap its natural resources, as it has the highest amount of oil reserves per capita – while Saudi Arabia has 1900 barrels per person, Guyana has 3900 barrels per person. Observers speculate that it could have more, as production is still in its infancy and many discoveries are yet to be made.
The country of 780,000 is located in the north-east of the South American mainland and shares land borders with Venezuela, Brazil and Suriname. However, it has traditionally collaborated more with Trinidad and Tobago across the Atlantic to the north. One reason for this is an ongoing territorial dispute with Venezuela over Guyana’s western Essequibo region, which makes up two-thirds of Guyana’s total land mass. Venezuela has laid claim to the region since the 19th century.
T&T is in an advantageous position to be a regional hub for logistics. “Located a day-anda-half’s sail from Guyana is T&T, where we have natural deepwater harbours, port infrastructure and so on,” Kevin Ramnarine, the former minister of energy and energy affairs, told local media in October 2019, noting Guyana cannot host such infrastructure because of silt from its rivers. “We should be positioning our economy to be a port and logistics supply base for Guyana.”
T&T is taking steps toward this end. In 2018 T&T Prime Minister Keith Rowley signed a memorandum of understanding (MoU) with Guyana’s President David Granger, which focused on energy collaboration. The MoU stipulates that the two countries will cooperate in four areas: technical assistance in the exploration and production of hydrocarbons; the exchange of information on public policies; the exchange of information regarding the value chain; and personnel training and technology transfer. “The combination of Guyana’s natural resources with the entrepreneurial expertise, capital and investment from T&T would result in a winwin situation for both countries,” President Granger told local press during the signing of the agreement. Guyana stands to benefit from T&T’s experience in production, marketing, gas, oil spills and relations with multinational corporations, President Granger said.
Working with additional countries whose experiences better mirror Guyana’s needs would also be beneficial to the development of Guyana’s oil sector. “Collaborating with countries such as T&T should be both of interest and strategic relevance to Guyana, in particular regarding deepwater oil extraction,” Graham Balchin, CEO of local provider of fabrication and construction services Trinidad Offshore Fabrication Company, told OBG. “This is because Guyana’s first round of hydrocarbons development since the exploration successes between 2015 and 2019, have been offshore deepwater, making it more challenging to expand local content fast enough to support the industry. However, Trinidad’s petroleum development was different. T&T has been producing hydrocarbons for over 100 years and began production activities onshore before moving to shallow, offshore sites and ultimately entering more challenging deepwater locations. Because of this history, the country has built up its local expertise gradually over the years, thereby decreasing its reliance on foreign labour and expertise.”
T&T assisting Guyana in bringing oil on-line would benefit both countries. Guyana would gain through knowledge sharing, while T&T would be able to participate in value-added services. “Guyana has attracted a lot of interest both regionally and globally, particularly from international oil companies in T&T and Suriname,” Frank Teelucksingh, CEO of environmental consulting firm Coastal Dynamics, told OBG. “Because of Guyana’s lack of existing capacity to add value and boost national content, international firms will likely be beneficiaries of oil production as well.”
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