BLACK GOLD: DODGING THE RESOURCE CURSE IN GUYANA

The Organisation of the Petroleum Exporting Countries (OPEC) and the U.S. Shale Revolution have been trending topics in the petroleum industry for years. Remaining at the centre of conversations among oil moguls and fuel tycoons, Guyana's emergent oil economy began challenging new conversations against the dominance of global oil market leaders - the dutch disease, and the resource curse. Then came the question, "What's next for the fastest growing economy in the world?" Bloomberg's “Odd Lots” podcast has the right answers. What was once considered only an uncovered nation on South America’s North Atlantic coast, now made popular, has a whopping production level of 391.98 thousand barrels of oil per day, the highest output since ExxonMobil's drilling in the Stabroek Block. This was made a reality by the oil exploration of the Liza Unity, accompanied by the Liza Destiny which began production of 151.13 and 240.86 thousand barrels of oil per day respectively. The ramping capability of Guyana’s oil economy may expedite the production of over 2 million barrels of oil per day, with 8 new FPSOs slated for operation in the Stabroek Block within the decade. Renowned oil historian, Gregory Brew, reflected on the history of emergent oil economies dating back to the 1940s to 1960s, and the striking parallels which mirror Guyana’s geopolitical importance, and avoiding the most dreaded, “paradox of the plenty.” Like Guyana, Venezuela and Saudi Arabia became “power players'' which were quickly recognised as major oil producers, shielding against the anticipation of high-expectations by interest groups which potentially overestimate the growth of early-stage resource-rich countries. Guyana is placed at the forefront of a challenge - avoiding the developmental deadend of export dependence. In this manner, it is foreseen that it would not be shocking for Guyana to soon have its own state oil company, like Norway which peaked after decades as one of the world’s largest crude oil exporters, mitigating against the resource curse and the feared dutch-disease. SOURCE: Bloomberg, Odd Lots Podcast

15 Nov 2022 11:15 | by anaraine