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12/5/2019

Guyana could be a Model for Climate Change:Aligning Oil and Gas with a Green Economy

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This blog is being written  when The Conference of Parties on Climate Change (COP 25) in Madrid  has commenced. Over the next 2 weeks leaders and technocrats from participating  countries will be debating policies and programmes resulting from the 2016 Paris Agreement. Among the key alignments, are limiting carbon emissions, attaining green agendas, supporting geoscience, highlighting  clean energy, rationalizing fossil fuel investments, implementing carbon taxes and expediting the Climate Investment Fund.   

From COP 25 to GIPEX 2  in Guyana 

While we await the decisions from COP 25, it is important to note that a most informative event,  the 2nd Annual Guyana International Petroleum Business Summit and Exhibition (GIPEX 2019), was held at the Guyana Marriott, November 20-22 hosted by the Office of the Presidency, Department of Energy  in collaboration with Exxon Mobile as a strategic Partner and several other events organizers, supporting partners and lead sponsors. The GIPEX 2019 Summit was complemented by an Exhibition that attracted a wide cross section of the Guyanese public, no doubt sensitizing them to the possibilities of opportunities in the new economy. The event   was held against a backdrop of impressive developments with potential for rapid economic growth. Guyana is poised to achieve first oil (production) later this month. Its good fortune according to the Department of Energy is illustrated by 16 petroleum discoveries with an estimated recoverable barrels in excess of 6 billion, foreign direct investments of US500M, the creation of 1357 jobs and the establishment of 70 joint ventures and partnerships. The main focus of the Summit was on streamlining the operations within the oil and gas sector  while paying particular attention to the Guyana’s commitment to the Green State as a foundation for its sustainable development.  

While the depth of the presentations and richness  of the discussions cannot be adequately captured in this brief sketch,  it is important to note the wide array of experts that participated. They ranged  from geologists, petroleum engineers and senior level managers in oil and gas to specialists in risks, assessment and insurance, digital transformation, economic diversity, and green development initiatives. Their presentations   established the complexity of the challenges and prospects for achieving success in Guyana’s new venture. For example, Dr William Heins, Product Ambassador at GETECK, UK, renowned geologist, explained through the “mirror theory” that many more successful explorations are  to be expected in Guyana. The experiences of other oil producing countries included officials from Ghana, Sierra Leone, Senegal, Mauritius, Nigeria, Suriname and Trinidad and Tobago. Not only did they amplify the 'mirror theory' but also identified the business models, the new economics of deep water exploration, protection plans to ensure minimal environmental disruption,  preparedness and appropriate responses to oil hazard substance and chemical pollution. These lessons to be learned will be of enormous financial benefits for Guyana and its potential to accelerate sustainable development. More specifically so, since Guyana's genetics and mineral heritage imply possible uptakes in gold, diamonds, bauxite and semi-precious stones also.

The Issue of Local Content  

The time from exploration  to production has been relatively short.  Hence there is need to accelerate and put in place, laws, training and capacity building.  A very useful set of discussions on enhancing local content, centered around how to use the “big boon” to benefit value chain opportunities for revenues obtained from natural resources to be diversified and invested in other sectors.  This included a very interesting exchange of ideas among senior policy makers and innovators on strategies to protect eco-systems and biodiversity, as well as discussions on development of eco-tourism, infrastructure and towns along the river.   But to establish a firm basis for these achievements require skilled negotiators, experts in energy law, provision for local companies to be given first consideration, certification and duty waivers for capacity building. In this regard, one outcome from GIPEX was the signing of an MOU between the University of Guyana and Halliburton, US oil and gas provider for US$2M to support the Faculty of Engineering and Technology for skills building.

There is also need for public education to manage expectations.  Kwame Jantuah, Ghana’s Head of Africa’s Consortium Limited reflected on the lessons learned from his country on the issue of local content. There was a national outcry that oil companies were not interested in hiring their welders and fabricators, not understanding that these skills in the oil industry are much different from the normal industries and therefore required special training.  Among the innovations he referred to were turning fisher folk into divers since they had no fear of the sea, teaching them new skills in underwater fabrication and maintenance of sub-sea infrastructure and training welders to maintain containerized cargo units. Of all the takeaways this one resonates most: “ Be very careful of the big word corruption … The oil and gas industry is big enough to take care of everyone if local content is practiced in favor of people and there must be trust, transparency and accountability and above all a long term development plan that will help invest the revenue equitably “ 

Next Steps 

A critical factor to be further explored is optimizing wealth  creation of the petroleum sector for emerging local producers to identify the opportunities, gaps and challenges that hinder citizens from actively participating in the sector.  Allied to this are accelerating the growth of national capacity and strengthening the bonds of inclusivity in the context of a Green State.   

Eddie Greene

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6 Comments
Joya Gomez
12/6/2019 04:01:56 am

Thanks for sharing! And congrats.
Eddie this GOFAD is topical, timely, and of course, educational.
The idea of transforming fisherfolk into fabricators and divers is particularly bold and imaginative thinking. Perhaps now Swimming will take its rightful place on our schools' curriculum?
Hopefully, the mistakes of so many oil-producing countries will not be made by Guyana which has the opportunity to be sensitive to, and align itself with, the policies and programmes coming out of Madrid. In addition, the conservation of Agriculture for food and job production will be critical.
As Chancellor, you are so well placed to help make this difference!
Go brave.
Alles Gute

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Wesley Kirton
12/6/2019 06:33:25 am

Eddie:
Informative and easy to read and comprehend by the “ordinary” man. In relation to the 1357 jobs….these are direct jobs? I would think the number of indirect jobs related to the oil and gas industry is much more.

A pleasure meeting with you too.

Regards
Wesley

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Thomas B. Singh
12/6/2019 06:52:37 am

This was an excellent post by UG's new Chancellor, especially for its juxtaposition of COP25 and GIPEX 2019: While COP 25 is about global negotiations and aspirations, GIPEX 2019 was about national imperatives and aspirations. As has been the experience of every previous Climate Change conference, there will be instances where the global and national interests diverge; but in this instance, the conflict of interests is stark. I endorse the view that Prof. Greene is now in "the right place (UG) at the right time (kairos)," and that this makes his appointment truly historic.

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Garfield Barnwell
12/6/2019 08:40:56 am

A development that should be duly noted
TED wants to become the global hub for the climate change crisis COUNTDOWN Ideas to action. TED is organizing the most consequential meeting in its history. Beyond spreading inspiring talks on the internet, the 35-year-old non-profit now aspires to be a key actor in the campaign against climate change. In an auditorium packed to the rafters with activists, politicians, business leaders, and artists, TED curator Chris Anderson introduced Countdown, a new initiative aimed at dramatically lowering the world’s annual greenhouse gas emissions levels from 55
Garfield

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FITZGERALD YAW link
12/31/2019 04:26:40 pm

Season’s greetings and all the best to all for 2020. Congrats to Eddie on his appointment as Chancellor of UG. There is the continuing need for UG to adapt to its role to lead in terms of education and research so that the oil and gas sector in Guyana helps with transformation of the Guyanese economy. This leadership has to include the need for a deepening of Guyanese nationality as part of the inclusivity we need for the sustainable development of the country. The hope for many is that the oil revenues can help to bring the country together and not continue to be further divided not only by race but in terms of rich and poor.

Guyana has entered the oil industry in a very different space from when, e.g. Trinidad and Nigeria entered the global oil industry. We need to move as fast as possible to get revenue from the oil and gas sector as renewables are advancing as energy options and world oil production can ramp up very quickly. Venezuela is at about 750,000 bpd now however if they get their act together they can get to 3,000,000 bpd quickly with associated negative impacts on oil prices. Think about Libyan and Iranian production getting beyond conflict and sanctions. Of course there are other factors than can push oil prices upwards.

Thus the key to oil and gas helping to transform Guyana is maximum production soonest, better contracts, robust monitoring of the oil and gas operations to ensure all parties get their fair share, superior management by Guyana of its oil revenues, and a Guyanese politics that rises above race on a broadly agreed national plan for sustainable development.

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11/18/2020 09:13:15 pm

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    Edward and Auriol Greene Directors, GOFAD.

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