For more than 100 years, Guyana’s CARICOM sister, Trinidad and Tobago, nurtured its economy on sweet crude oil. Its
booming success with oil led to the creation of a national oil company called Petrotrin, and one of the world’s most lucrative and expertly designed industrial sites for gas, called Port of Point Lisas.
With oil and gas, Trinidad and Tobago was able to help Guyana in times of hardship. In fact, it was Trinidad that stepped up to the plate and ensured that Guyana was able to clear off some $500M in debt a few years ago.
But today, Trinidad’s fortunes have changed. Its oil and gas, both finite resources, are running out. Petrotrin can no longer afford to be left open since it owes the Government over US$100M in taxes and is buried in US$280 in debt.
Oil companies in Trinidad and Tobago, which have depended on the extractive resource, are running scared. They wonder what will become of their workers. What will become of their livelihoods? Who can they turn to?
Four hundred and thirty one miles away from its blue shores could be the answer—Guyana. In 2015, USA oil and gas giant, ExxonMobil, announced that it had discovered oil in Guyana. During that time, it was projected that Guyana could see 100,000 barrels of oil per day. Eight more discoveries later, that figure has jumped up to 750,000 barrels of oil per day. Even at its best performing days, Trinidad never saw such riches. In fact, the new projections now make Guyana the only country in the world with the highest oil production per capita. This is an incredible feat; a picture that speaks of astounding wealth. But troubled Trinidad wants in on this success.
WORRY OVER MOU
By the time this article would have been published, Guyana an the Prime Minister of Trinidad and Tobago, Dr. Keith Rowley, would have signed a Memorandum of Understanding (MoU) to ensure partnership between the two on oil and gas matters.
While some are encouraging of the agreement between the two states, many private sector actors, like the Georgetown Chamber of Commerce and Industry (GCCI), are worried. Their fears are predicated on the fact that preference would be given to TT firms since they are equipped with the experience and technology to tender for goods and services needed by ExxonMobil and its subcontractors.
In fact, some have said that the government should create a mechanism whereby TT firms can enter into joint ventures with locals so that there can be a transfer of expertise. In the absence of this, several businessmen have expressed that there could be a takeover of Guyana’s oil and gas industry by its sister country, thereby leaving Guyanese businesses out in the cold.
The Guyana Inc. Magazine recently interviewed Foreign Affairs Minister, Carl Greenidge on the matter.
The Vice President said, “Indeed there are concerns about Trinidadian firms coming to Guyana to invest in the oil and gas industry, but at the end of the day, there is nothing which could be done. We need people who have the capacity to come here and help us and Trinidad has the knowledge that we need. Also, this is a CARICOM sister that has been good to us and we have a long history with them.”
Minister Greenidge said, “It was this very country that was carrying the costs for fuel in the 70s and the 90s when we couldn’t afford to do it. So, we can’t just think of helping our brothers and sisters when everything is going well for them. That is not how you nurture bilateral relations. That is not diplomacy.”
HOW TT AND GUYANA CAN PARTNER
Guyana’s oil and gas sector management requires a wide range of skills and services, with deep experience and knowledge to do justice to the people of Guyana, investors and the resource. Because the industry is new to Guyana, it will likely have a large imprint on the economy, and by virtue of the small human resource base, it is no surprise that the governance capacity in Guyana is not currently ready for the task.
While the obvious thing to do would be to engage outside support to help the government and people of Guyana to immediately engage the industry players, that by itself can be an unsustainable or insufficient model, if the “right” persons are not engaged. Minister Greenidge, like many
others here and abroad, are of the view that Trinidad and Tobago would be ideal to help the government manage day-today decision-making; as well as help in designing, building and supporting start-up operations of Guyana’s own policy and legal and institutional frameworks to manage the industry into the future. In fact, utilizing expert resources from Trinidad and Tobago would complement Guyana’s internal capacity development goals, if done well. In that regard, the following recommendations on the way forward for managing the industry in its current state and developing the requisite governance systems (policy, legislative and institutional capacity) provides a framework for support from development partners such as Trinidad. • Given the wide range of skills, competencies and experience that will be required, it is suggested that Trinidad assists the Government of Guyana in engaging a small advisory/consultancy support team (Technical Advisory Team) to help prioritize and facilitate a programme of capacity building, while “holding the hand” of the Government during current ongoing activities.
• The mix should be able to cover the multiple facets of governance required to effectively manage the sector for the inclusion and maximum
benefit of the people of Guyana.
• With the need for the outcomes to have a distinctively Guyanese flavour, the team of consultants should ideally include Guyanese from the Diaspora (as available) and work alongside suitable Guyanese counterparts.
• All team members should preferably be evaluated and hand-picked by the Government of Guyana, with the support of a trusted, in-house programme manager, if need be. The in-house programme manager will support the design of the work programmes, identify the required competencies and assist in selection, oversight and quality control of the work of the Technical Advisory Team and other consultants, advisors and
contractors who may be brought on from time to time for specialist support.
• Additionally, it is common practice in the oil and gas industry for companies to, for example, instead of using in-house staff, contract an ndependent “company man” to supervise major contractors for drilling, engineering, construction, seismic and other specialist technical services, since the supervisory expertise is transitional and extremely specialist.
• A suitable programme manager should have a wide range of skills and competencies which cover strategy and policy development and implementation; upstream operations and institutional development.
• The manager should also have experience working along the entire upstream value chain, in senior technical, managerial and/or leadership positions, within a similar government organization. He should have worked in similar economic, social and cultural contexts as Guyana. Private sector experience will be an advantage.
• With Trinidad at its side, the Government of Guyana could receive assistance in identifying and securing the services of the ideal programme manager and the requisite Technical Advisory Team and the shorter term advisers that will be needed to audit and/or develop systems and procedures for operations by the oil operator/s. In addition to the aforementioned, Trinidad and Tobago is equipped to support Guyana by:
• Sourcing and/or funding training for non-technical personnel in the various government agencies, including the oversight entities (Parliament, Civil Society, media, etc.), Ministries and government agencies and the private sector.
• Sourcing and/ or funding support to develop Standard Operating Procedures for the Ministries of Natural Resources and Finance and its egulatory agencies. (Well documented standard procedures are a powerful tool in capacity building, as a limited number of individuals are more
efficient if the guess work is taken out of their daily activities and the way things are done is consistent and repeatable. This allows for improved proficiency. Further, well documented SOPs, when properly implemented, help with risk mitigation, while providing for transparency and accountability.)
• Provide mentoring support for cost management: Contract negotiations workshops for Guyana’s negotiations teams; audit procedures; and accounting procedures.
• Designing and developing training programmes at technical and vocational levels, with proper certification. These skills are needed in the greatest
numbers in the upstream sector and are often transferable to other sectors, such as manufacturing, food processing, construction, automotive and agriculture. It is now up to Guyana’s authorities to manage this developing relationship with Trinidad and Tobago to ensure that both benefit in
the oil and gas sector.