How Can Guyana Make the Most of Oil?
Feb 08 2018 Read 1025 Times
Pegged as one of the oil industry's hottest new prospects, Guyana has recently treated investors to a string of new discoveries. The small, relatively undeveloped country sites on the north-eastern coast of Latin America and has won attention from multinational oil and gas corporation ExxonMobil.
The company has just identified 3.2 billion barrels of oil in the Stabroek block, which sits 120 miles off the coast of Guyana. Considering ExxonMobil's cautious reputation, the actual figures could be significantly higher. Furthermore, the rest of the Guyana Basin coastline remains largely unexplored which means there could be even more discoveries on the horizon.
The flipside of oil wealth
So what do the findings mean for Guyana? With production set to begin by 2020, Exxon maintains that development will bring investment, jobs and wealth to the country. Though there's also the flipside, with critics warning that oil could usher in corruption, conflict and violence. Experts like Leif Wenar, author of Blood Oil, warn that oil can fuel autocracy, fund civil wars and create a mood of nationalistic resentment among the population.
Sudden wealth can also trigger a drastic increase in currency value which can lead to "Dutch disease", an economic illness which sees one sector destroy other trades. In Guyana, industries like sugar, gold, bauxite, shrimp timber and rice could be under threat. To rise above these common issues experts stress that Guyana needs to champion strong political leadership. Conflict can also be avoided by actively supporting Exxon as the country's keynote operator and investor.
Setting a pace of development
The first step is to set the pace of development by implementing a depletion policy. This would phase long-term production and mitigate the risk of a "gold rush" scenario. Simultaneously it would allow local companies to heighten their capabilities and allow them to win a share of Guyana's oil-related activity. This includes everything from building new ports and infrastructure to providing food and accommodation to workers. Supporting local businesses would not only boost the national economy but would also create local jobs and eliminate the risk of becoming dependent on imported labour.
Avoiding a spending spree
Then there's the issue of how to use the money that oil will bring to Guyana. While calls for immediate spending will be strong, experts assert that development of infrastructure should be a top priority. This includes roads, schools, hospitals and other investments that will support the growth of the economy and the wellbeing of the local population.
As Guyana develops its oil industry the focus will shift not just to petroleum, but also to petroleum products. Spotlighting the Tier 3 rule, 'Ultra Low Sulphur Analysis in Liquid Petroleum Products Using Monochromatic Wavelength Dispersive X-ray Fluorescence (MWD XRF)' explores the latest changes from the U.S. Environmental Protection Agency.
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