Guyana: the government plans to create a national oil company

The Guyanese government on Wednesday hinted at the possibility of exploring several options with the remaining oil blocks, including an option to form a national oil company.

Vice President Bharrat Jagdeo, speaking at the International Energy Conference and Expo: Guyana, said previous oil blocks had been allocated on a first-come, first-served basis.

But he told the conference that policy had changed given the discovery of oil and the remaining oil blocks would either be auctioned off in the third quarter of this year or alternatively used to form a national oil company.

“To provide clarity by the third quarter of this year, all of these decisions would be made. So either we will make the decision to be part of a national oil company with these remaining blocks or we will bid them with our seismic sans (studies), Jagdeo said.

He said that the government has already received several proposals from major operators who are ready to work with the authorities here on the creation of the national oil company.

Jagdeo also said the pace of development in the country is fast and the government is trying to evolve to keep up with the pace.

“At the government level, we have to try to move the regimes and our regulatory approval at the pace that we don’t become a prankster on the development of the industry and slow the pace,” Jagdeo said, acknowledging that he has been a challenge to develop the local oil sector.

“So while we haven’t evolved all the policies and the structures, the institutional structures, the management structures, the regulations to where we would like them to be ultimate, in what will be a mature environment for the management and industry regulation we are still lagging behind in this regard,” said Jagdeo.

In his presentation titled “Guyana’s Approach to a Sustainable Future,” Jagdeo spoke about the government’s plan for the use of oil revenues, including economic diversification.

He said that in working to be sustainable, Guyana will not get carried away by the prescriptive goals set by the international community, which has historically been insensitive to the specific realities of the developing world.

In this regard, he argued that small countries could never compete with the developed world on the same basis. These international goals, he noted, have come and gone many times, and the policies and finances to achieve them are often lacking.

Jagdeo said the Kyoto Protocol, the international treaty that operationalizes the United Nations Framework Convention on Climate Change, was based on each country’s ability to play its part. He said that now, however, the situation is one of burden sharing, with poorer countries bearing almost the same burden as richer countries, even though their respective contributions to the climate crisis are radically unequal.

“We believe we have a global obligation to act on climate change. But we also want a future for our people,” Jagdeo said.

Meanwhile, Natural Resources Minister Vickram Bharrat said the country could produce more oil from the Takutu Basin in southern Guyana.

Guyana’s oil production since 2015 has come from blocks offshore Guyana, although there has been interest in onshore areas which may also contain profitable oil reserves.

“There has been some interest in the Takutu Basin,” Bharrat told the conference, saying “it’s something that our government is currently discussing as well as how we move forward with other offshore blocks”.

Bharrat said new technologies and equipment are contributing to renewed interest in the basin even as the Guyana Geology and Mining Commission (GGMC) has reported unsuccessful wells in the past.

Comments are closed.