Well-known for its gold production, Guyana is now in the position where its deposits of “black gold” promise take the oil production lead away from Trinidad and Tobago. With the discovery of large quantities of crude oil in Guyanese waters by US multinationals, extraction is next logical step. Guyana is now poised for economic take-off.
For the country to lift-off in this direction is to put Trinidad and Tobago into second place in the region, where crude output has now fallen enough to make it into more of a gas-based economy. Once known throughout the Caribbean for a volume of oil production that took Trinidad and Tobago’s economy to startling and dizzying heights, Guyana is now on a similar path to prosperity. It is now positioned to take away the title “energy-rich”, which once described prosperous Trinidad and Tobago.
According to a New York Times report in January, drilling so far may have uncovered up to 1.4 billion barrels of oil mixed with natural gas, a reserve that is comparable to the larger fields drilled in South America. This newspaper has also reported experts saying early estimates indicate Guyana could have nearly four billion barrels of recoverable oil, which at today’s prices is close to (US) $200 billion.
Speaking in Guyana in January, former Trinidad and Tobago Energy Minister, Kevin Ramnarine said: “What we could be looking at here is the possibility of the Guyana-Suriname basin being the new North Sea… It becomes very difficult to wrap your mind around the enormity of what is happening here.”
He added: “It means [Guyana] is going to become wealthier in a short space of time; it means that the economy can be doubled within the next five years… and the economy could probably quadruple after the next ten years. The standard of living is going to improve.”
With such prospects in the ground, there are well-documented pitfalls any country can fall into if it fails to adequately prepare for such dramatic economic, political and social change. Well-known in the Caribbean political lexicon today is what the former Jamaican Prime Minister Michael Manley said when he described how the then PNM government of Trinidad and Tobago misused and misspent the huge oil windfall of billions of dollars from 1973 to 1984, saying the oil-wealth passed through this nation, “Like a dose of salts”.
Failing to learn from history, Trinidad and Tobago continues to be a big consumer of foreign currency despite the hardships of the present-day world economy, and remains relatively slow in building up and stabilising its rainy-day Heritage and Stabilisation Fund. More modern-day and readily-available as a sober reminder of where poor policy planning and a lack of vision could lead a nation is the economic, political, and social trauma now being endured by Venezuelans.
These examples are a reminder – and incontrovertible evidence – for the Guyana government to ensure best practices are put in place in the futuring of its energy-based economic development, so as to avoid such policy failures as in Trinidad and Tobago, which can have the effect of a curse, or worse, a plague – so painfully evident in another economy that did not diversify, as is Venezuela today.
Trinidad and Tobago is no doubt anxious to welcome its neighbour Guyana to the world community of hydrocarbon-producing countries. Also, as a newcomer to the world and regional energy producers, Guyana is certain to turn to Trinidad and Tobago and its energy experts and service companies for guidance. Such early collaboration is already taking place through support from Trinidad and Tobago’s Energy Chamber, with Guyana’s historic first oil and gas conference taking place in Georgetown this month.
These are wise first steps, since such engagements promise to be mutually beneficial as closer economic ties grow between the two nations, even as Guyana gets ready to benefit from its new wealth of “black gold”.