In terms of sheer numbers, Petroleum Experts, Dr. Remi Piet and Arthur Deakin posit that the Payara field which is expected to produce roughly 220,000 barrels of oil per day is by no means, just another ordinary oil project.
According to the industry stakeholders, Payara is a one-of-a-kind development that represents an estimated US$465 million in annual revenues for the government based on Brent Crude at U$40/barrel. In a recent opinion piece which they co-authored, it was noted that this is nearly half a billion dollars that could be used for schools, hospitals and the strengthening of Guyana’s inadequate sea defences.
Taking this into consideration, Dr Piet and Deakin, two senior officials at Americas Market Intelligence (AMI) and Africa Market Intelligence (AfMI) are of the firm view that delays in approval for the Payara project are not in Guyana’s interest.
Although the Payara project was set to start operations by 2023, the initial startup date has been delayed by six to 12 months. The government argues that the field development plans presented by the Stabroek Consortium led by ExxonMobil require key adjustments. But Piet and Deakin posit that the more likely explanation is that Guyana’s political impasse has prevented government officials from making any important decision in the past four months. Until the next administration is sworn in, the experts noted that the government will remain in this detrimental limbo that is freezing the country’s economic momentum.
From the outside looking in, they opine that the delay of the Payara project could portray an image that Guyana is desperately trying to avoid, that is to say, an unreliable country lacking the stability requested by foreign investors.
Expounding on this point, the industry stakeholders noted that nearby in Mexico, President Lopez Obrador’s volatile attitude towards infrastructure and energy projects has led to a 24% decline in foreign direct investment in 2019. Like Mexico, Piet and Deakin note that an unstable, delay-prone regulatory process in Guyana will limit the arrival of new revenues and could deprive the country of much needed regulated private investments. At a time of great economic uncertainty and cuts in capital spending, the Petroleum Experts opined that a predictable framework will help lure international players looking for certainty in their investments.
They strongly contended that delays in the approval of the project, including technical assessments and the evaluation of societal benefits will also impact the trickling down of economic growth to those who need it the most in Guyana.