‘We’re going to spend oil money as a checkbook,’ says investment chief Peter Ramsaroop, presiding over 30% GDP growth. ‘This is the last time you will see such a development in the world.’
Read the full story on Forbes: https://www.forbes.com/sites/christopherhelman/2024/05/09/guyana-touts-itself-as-capitalist-paradise---for-more-than-just-big-oil/?sh=6c29c2e07994
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Read the full story on Forbes: https://www.forbes.com/sites/christopherhelman/2024/05/09/guyana-touts-itself-as-capitalist-paradise---for-more-than-just-big-oil/?sh=6c29c2e07994
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LifestyleTranscript
00:00Here's your Forbes Daily Briefing for Saturday, May 11.
00:05Today on Forbes, Guyana touts itself as capitalist paradise for more than just big oil.
00:13In just eight years since the first discovery of oil in the Atlantic waters offshore Guyana,
00:18ExxonMobil, with partners Hescorp and the China National Offshore Oil Company, have
00:23sunk more than $50 billion to drill 100 wells and install a maze of pipes and valves on
00:28the seafloor.
00:29The money also has been used to anchor three giant vessels to slurp up crude oil and pump
00:34it, in one million barrel batches, into supertankers for export to the world.
00:41Already this development of the area, called the Stabrook Field, is yielding 600,000 barrels
00:46per day.
00:47That output is set to more than double by the end of 2027, with three more phases planned.
00:52They'll keep going from there, with expectations that by 2030, Guyana could be exporting two
00:58million barrels per day, on par with Kuwait.
01:03At the annual offshore technology conference in Houston on Wednesday, Exxon's Guyana president,
01:08Alistair Rutledge, marveled, quote, with the trajectory we are on, within this decade,
01:13Guyana will become the second largest producer of oil in South America, second only to Brazil.
01:20Rutledge's enthusiasm was amplified by Guyana's chief investment officer, Peter Ramsarup.
01:25During a panel discussion, he said, quote, if you're in the oil business, and you're
01:29not in Guyana, you're missing out.
01:32This is the last time you will see such a development in the world.
01:36That's both because there's so few of these so-called elephant fields left to find, and
01:41because fossil fuels are supposed to be on their way out.
01:45Ramsarup said Guyana rejects any such anti-fossil fuel admonitions, saying, quote, enviros say
01:50don't take the oil up.
01:52It's against the new rules.
01:54The developed world has all these decades to make themselves wealthy, and you're going
01:57to tell us not to take the oil up and keep ourselves poor?
02:01Our president says hell no.
02:04He's referring, of course, to outspoken president Mohamed Irfan Ali, elected in 2020.
02:10Ramsarup said, quote, his measure of success is the prosperity of the Guyanese.
02:15We're going to spend oil money as a checkbook.
02:19Guyana is already building 10 American-style hospitals and has funded 30,000 scholarships.
02:26Capitalists have caught on.
02:27A dozen hotels are under construction in the capital, Georgetown, including a $350 million
02:32luxury resort backed by Qatari money.
02:36Guyana's GDP grew 60% in 2022 and 30% last year.
02:41Deodat Indar, minister of public works, said, quote, it might look chaotic and it might
02:46look like overheating to some economists, but it is what is happening.
02:52So what's the catch?
02:54Indar said, quote, there's a monkey on our back.
02:58He's referring to neighboring Venezuela, which last year declared its intent to claim a third
03:02of Guyana's land, the Essequibo region, by force if necessary.
03:07Indar said it's just an illegitimate claim, quote, designed to upset our momentum.
03:13He explained that national borders were demarcated by treaty in 1899 and settled further after
03:19Guyana gained independence from the U.K. in 1966.
03:23As a member of the U.N., CARICOM, and the British Commonwealth, Guyana puts on a brave
03:28face despite its negligible military.
03:31Indar said, quote, we have friends.
03:35The country is safe enough for ExxonMobil anyway, and for Chevron, which is angling
03:39to acquire Hescorp for $50 billion, mostly for its Guyana stakes.
03:45Another consortium of Petronas, Total Energies, and Qatar Petroleum is finalizing contracts
03:51and keen to start its own offshore exploratory drilling.
03:55Routledge says Exxon is engineering the oil fields for maximum long-term extraction of
04:00every drop of the 11 billion barrels discovered so far.
04:04By the time the first six phases are complete, they'll have 250 wells and 200 miles of flow
04:09lines installed on the seafloor.
04:11Indar says that investors shouldn't wait until conditions are perfect to exploit opportunities.
04:16He says, quote, the opportunity to find gaps and develop markets is difficult.
04:21But in developing countries, the gaps are there.
04:23We want to make sure we fill those gaps now.
04:26Ramsarup adds, quote, if I was an investor, I would look at developing the ag industry.
04:33That means pineapples, coconuts, pumpkin, corn, soy, coffee, fish, and shrimp.
04:38But to be sure, oil will remain the biggest game in Guyana.
04:43Already, Exxon says it's tapping 1,700 domestic suppliers.
04:47It's common for countries with emerging oil industries to require oil companies to employ
04:51certain amounts of locally sourced materials and labor.
04:55Guyana doesn't want this to become onerous.
04:57Richard Rambaran, an economist and director at the Georgetown Chamber of Commerce, says,
05:02quote, we are not doing local content in a punitive way, but in a way that will foster
05:07private enterprise.
05:10For full coverage, check out Christopher Hellman's piece on Forbes.com.
05:16This is Ciaran Meadows from Forbes.
05:18Thanks for tuning in.