Guyana's Biggest Challenge is its Breath-Taking Speed of Change
In today’s world of oil and gas, Guyana is rarely off the front pages. But this is a relatively new phenomenon.
Since independence from the UK in 1970, the country has seldom made a splash in world affairs except for the infamy of 1978’s mass suicide in Jonestown. That aside, Guyana remained an innocuous agricultural outpost wedged between Venezuela, Brazil and Suriname. But, in 2015, everything suddenly changed for Guyana when Exxon struck oil and the world took interest.
Since then the rise of the country’s fortunes has been meteoric, bringing a welcome boost to an industry in global decline since oil prices slumped back in 2014.
With 5.5 billion barrels of recoverable hydrocarbons, plus more prospects on the horizon, Guyana’s economic outlook has been revolutionised. To describe its oil discovery as a ‘game-changer’ is to woefully underestimate how life will never be the same again for the Guyanese.
With production ramping-up to 750,000 barrels per day (bbl/day), Guyana will soon top the list of oil-producing countries by bbl/day per capita, comfortably looking down on second-placed Kuwait. At that stage Guyana will be thrust into the world’s Top 25 countries by production volume, ranking ahead of neighbouring oil producers Trinidad and Brazil.
Inexhaustible opportunities - and threats
The potential for huge economic upsides is unquestionable, but Guyana still faces many difficult challenges in order to capitalise on these. Since 2015 debate has raged on an inexhaustible list of hot topics, covering taxation policy, anti-corruption legislation, chronic skills shortages, infrastructure improvements, environmental protection, establishing a national oil company and developing a sovereign wealth fund - to name a few. But for a government with precious little experience in these matters, the most important question is – where do they start?
Above all else, the one thing putting most strain on the country is the speed of change. Later this summer the Liza Destiny FPSO will set sail from its shipyard in Singapore to hook up and commence production in 2020 at the Stabroek field. That makes it a mere five years in which Guyana has transformed itself from economic dependence on sugar and rice exports to its impending status as a major player in global energy supply.
The ‘speed of change’ is keeping today’s business leaders on their toes but few of them are dealing with the kind of supersonic speed of change sweeping over Guyana. And before Guyana can truly gain from the opportunities that lie ahead, the government must still make some huge decisions, and get them right, all within a rapidly reducing timeframe.
This creates a once-in-a-generation need for professional advisers to help steer Guyana in the right direction. At PKF, we not only have deep expertise in advising the energy sector around the world, but we have a long-established office in-country. So, we’re involved in the global issues at play and we’re also at the heart of business in Guyana. We’re here already and we’re ready to help.
Jamie Drummond is a director in PKF International’s assurance team