Guyana could become the “world’s fourth-largest global offshore oil producer by 2036”, according to a recent report. The Inter-American Dialogue’s daily Latin America Advisor featured a Q&A of some experts in the matter, including Arthur Deakin, co-director of the energy practice at Americas Market Intelligence.
Here is what Deakin said:
Guyana has established several different organizations and institutions to manage the energy sector and its funds. However, when doing a deeper analysis, the checks and balances implemented are closely tied to the executive branch. Most of the members appointed to the committees responsible for the management of the oil monies, ranging from the NRF Board of Directors to the Investment Committee, have either been appointed directly by the president or chosen by the National Assembly, where the president’s party has a majority. This prevents the much-needed separation between political influences and the billions of dollars flowing into the country.
It is also concerning that $400 million was drawn down from the Natural Resource Fund in May and July, before any of these oversight mechanisms were in place. This money has been allocated to finance ‘national development priorities,’ but it is unclear where exactly it will be spent. Guyana needs the participation of an independent and international body in the monitoring of these funds to ensure appropriate and transparent spending of the revenues.
Regarding Guyana’s role in the energy transition, it can start by monetizing its gas reserves and ensuring that it replaces other dirtier forms of energy, such as coal or heavy fuel oil. It should also invest its oil revenues on climate mitigation and adaptation mechanisms within its own borders.
In co-leading AMI’s energy practice, Arthur oversees dozens of studies in the sector, focusing on market feasibility, ESG due diligence, market entry, opportunity benchmarking, partnering studies and other strategic areas for energy companies operating in Latin America.