The near five-month-old political impasse over the outcome of Guyana’s March 2 general elections has, not unexpectedly, attracted comment in the international oil & gas media with a recent report asserting that the failure, up until now, to see the declaration of the winner of the poll is not unrelated to who controls the country’s fortune-transforming oil wealth in the immediate future.
The Stabroek Business has seen a July 13 Bloomberg article authored by Peter Millard and Kevin Crowley and published by the on-line news resource, Rigzone, that quotes a senior official at a high-profile firm of US energy specialists as linking the still undeclared result of the poll to a political joust over who administers the anticipated huge resources from the country’s oil & gas industry.
The article quotes Jed Bailey, founder and managing director at the US energy analysts, Energy Narrative, as saying that the political drama currently playing out here is “clearly over who controls the oil money,” a comment that has been made all too frequently in local discourses.
The post-elections political faceoff here coincides roughly with the start of the recovery of what is now confirmed as the country’s vast oil resources, reached by ExxonMobil in May 2015 and which, observers say, can potentially, radically alter Guyana’s development trajectory.
Bailey’s description of the unfolding political events here as a manifestation of “classic resource curse-type material” harks back to earlier warnings raised during exhaustive local discussion on the country’s oil resources during which the so-called resource curse – the phenomenon of resource-rich countries failing to optimise the returns from their natural resource wealth – was the subject of several discourses. The resource curse phenomenon is often linked to the failure of governments in office to use the country’s wealth to respond satisfactorily the public welfare needs and is often manifested in varying degrees of conflict between feuding factions over control of those resources.
There have been previous reports in the international media that, in the wake of the succession of huge oil finds since 2015, Guyana could become a victim of the resource curse.
Last week, as news broke that two of ExxonMobil’s drill ships had resumed what the company has identified as its priority offshore oil recovery pursuit, the Bloomberg article, simultaneously, made a pointed reference to what it described as a “messy turn in local politics” arising out of the March 2 poll and specifically over who governs. Even as the Bloomberg article was quoting ExxonMobil as saying that “travel restrictions” which had impacted on its “ability to move workers into Guyana” will also affect its “ability to maintain normal operations offshore,” it was, as well, focussing as on what the article termed “a political standoff” which it says “is delaying approval” of the US$6 billion, 220,000 barrel-a-day Payara project that was “slated to start production in 2023.” Exxon and Hess, the two lead players in the Payara project, are quoted as saying that the project could now be delayed by “up to a year.”
In other respects, the Bloomberg article suggests ExxonMobil’s operations have not been proceeding quite as planned, citing “drilling interruption” and “repairs to Exxon’s first production vessel in Guyana” as factors that have “constrained output in the second quarter” and forced the company to “flare natural gas, postponing plans to reach the unit’s peak production of 120,000 barrels a day.”
Guyana’s political situation has also attracted comment from a senior official of another international energy research firm, Rystad Energy, whose Vice President for Latin America, Schreiner Parker, is quoted in the same Bloomberg article as saying that ExxonMobil has been put in a position of “having to sit on their hands because of political developments,” a pointed reference to the ongoing March 2 general elections brouhaha.
