Industry experts have already concluded that the world’s thirst for oil has reached its peak. In fact, The Organization of the Petroleum Exporting Countries (OPEC) which controls over 50% of global oil supplies and about 90% of proven oil reserves, has disclosed that it expects demand for its core products to fall more than 10% among the world’s richest economies this year while adding that it will never return to pre-pandemic 2019 levels.
Even British Petroleum has called time on the world’s demand for fossil fuels after finding that demand for oil may have already reached its peak and faces an unprecedented decades-long decline following the COVID-19 pandemic.
Taking this into consideration, Chatham House Associate Fellow, Dr. Valerie Marcel says it is understandable why countries like Guyana are in a rush to extract and monetize their resources. Even as it does this, the expert warns that the country must be mindful that the rush to develop oil may leave the country not capturing the maximum value from the resources.
The Associate Fellow said, “When you are rushing to exploit the resources, you are not thinking of ultimate recovery which is to get as much of the oil and gas out, you aren’t focusing as much on, I think, the importance of an integrated energy and development plan. You don’t have the map laid out so you can fix this piece like Payara or Liza field into it and see how you can optimize costs by sharing infrastructure across fields.”
She added, “…You have not looked at all the ways in which you can ensure cost reductions. You don’t have time to think about these things if you are rushing through.”
Taking this into consideration, the industry expert said that perhaps, the fast pace at which Guyana is moving to extract is perhaps “too fast.” The Chatham House Fellow said it is extremely important that Guyana puts policy planning in the driver’s seat for the sector so as to ensure the long term goal of having maximum value is achieved.