Guyana, the next Caribbean frontier?

The Finance Minister also informed that in 2014 the price of natural gas averaged at US$6 per MMBTU and in 2016 dipped to less than US$2 per MMBTU. It was also reported that Petrotrin had incurred losses of TT$4.2 billion between 2011 and 2016.

On two occasions and within a nine-month period, the government withdrew US$626 billion from the Heritage and Stabilisation Fund. In December 2016, the Central Bank issued TT$1billion worth of bonds on the local market and now there are plans to access a further US$300 million from Andean Corporation, a bank established in 1970 in Caracas, Venezuela.

These economic realities are pressed against continuing forex and natural gas shortages negatively affecting both energy and non-energy industries. Added to this are the recent announcements of closures of State companies, and the creeping but increasing loss of jobs in the private sector. One can therefore conclude that there is an accelerating downward spiralling in our economy.

Contributions from taxation, tourism, and other actors in the service and manufacturing sectors simply cannot offset the loss of substantial earnings from the energy industries. While we are trying to manage our economic woes, right in our backyard, energy giant ExxonMobil has discovered over a billion barrels of recoverable crude oil some 200 km offshore Guyana. Production is set to begin in 2019, with a daily estimate of 100,000 barrels. This discovery has prompted the World Bank to upgrade Guyana’s economic classification to upper middle income, thereby improving its eligibility to loans from the World Bank.

What can this mean for Trinidad and Tobago? Firstly, Guyana has no refinery capabilities but is now assessing the feasibility of building one. At the recently held Guyana Oil and Gas Conference Petrotrin’s VP Refining and Marketing, Astor Harris suggested that Petrotrin has the capacity to refine Guyana’s crude by reducing its importation of international crude in preference to Guyana’s production, which from all accounts would be economically feasible.

We also know that this year Guyana will start building an onshore US$500 million oil and gas facility to facilitate separation and testing of oil and gas, expected to create 600 new jobs in the short and medium term. This project should be of interest to Trinidad and Tobago, particularly the recently appointed Restructuring Committee whose members are to examine Petrotrin’s operation.

It is my view that our human capital assets at Petrotrin and the wider energy sector possess the capabilities to be active players in this first project. Is there a plan to exploit this opportunity? We need to beat the iron while it is hot or we may be left behind although we are so geographically close to Guyana.

Already FURGO, an international company established in the Netherlands has formed an alliance with Ground Structures Consultants Ltd to facilitate training of Guyanese citizens and to support local economic development. They provide geo-intelligence and asset integrity solutions for large constructions, infrastructure and natural resources.

Such an arrangement, I am sure, must be based on formal arrangements between the Guyana government and these extra-regional service providers. This therefore raises two important questions:

1. Where is the renewed Memorandum of Understanding (MOU) between the governments of TT and Guyana for technical cooperation and support?

2. Does the arrangement with FURGO constitute a breach of the CARICOM Treaty which provides preferential mechanisms between Member States for the supply of goods and services?

With my limited knowledge of the oil and gas business, we could probably do well in outsourcing our energy-based skills and reengineer the use of our refinery, to ensure Petrotrin’s long-term sustainability. This, I am sure must be at the forefront of the members of the Restructuring Committee as well as the leadership of the OWTU.

Supporting the people of Guyana through our business development and technical expertise should not be limited to the Government of Trinidad and Tobago alone. It is obvious that private sector capital from TT will be more than useful in exploring energy development opportunities in Guyana. Such capital explorations will be bolstered by the fact that it will accompanied with the prerequisite human resource skills and know-how from a well-experienced work-pool. In this regard, it was indeed refreshing to observe Massy Energy’s presence at last week’s Oil and Gas Conference.

Our government and private sector must proactively and aggressively capitalise on the opportunities Guyana now presents. Although this will result in an outflow of human capital, I am confident that at this time we possess the resources to accommodate such intellectual outflows. Indeed, this could well be a timely and opportune development right on our doorstep with both Guyana and Surinam as Trinidad has a surplus of trained skilled process operators, who, in many instances are head-hunted internationally.

There are many big players in the international market who can offer the Guyanese government much more access and support. The question therefore is can the government and private sector in Guyana and Trinidad and Tobago work together so that both countries achieve a win-win for the region as members of CARICOM?