With an estimated 8 billion barrels of oil equivalent resources in the Stabroek Block and a projected fiscal windfall of US$49 billion in revenues over the next few decades, the Inter-American Development Bank was keen to note that Guyana is certainly poised to be a significant player in regional and international energy markets.
Even in the face of this massive revenue stream, the financial institution cautioned that Guyana needs to design long-term development strategies that will avoid overreliance on the petroleum sector.
Expounding on the importance of this approach, the bank said that Guyana ought to pay keen attention to the recent price swings for crude oil on the market, triggered by both traditional sources of instability (the interplay among producers, and under-investment), the economic effects of the novel coronavirus, and the proliferation of renewable energy technologies. The bank said that these, are major forces that will gradually lead to a significant erosion of fossil fuels reliance globally. With this in mind, the IDB said that Guyana “has a very narrow window to get what other countries in the past have struggled to get right over decades.”
The financial institution further noted that it is imperative that local authorities embrace the lessons learned by countries that have had successful hydrocarbon sectors and avoid the mistakes of those that have failed to create long-lasting value.
With strong political will, the IDB said that Guyana could find itself among the handful of countries that successfully overcame challenges and established models of good governance within their extractive sectors.