In this webinar, panelists examined US policy towards the Caribbean during the first year of the Biden Administration, with a focus on notable issues in need of attention and the opportunity to discuss these issues when the US hosts the Summit of the Americas in June 2022
Sir Ronald Sanders
Ambassador of Antigua and Barbuda to the United States and the Organization of American States
Download the Working Paper presented by Sir Ronald Sanders here.
Roger Kranenburg, Vice President, Energy Strategy and Policy, Eversource; Anthony Bryan, Senior Fellow , Institute of International Relations UWI, St.; Augustine, Trinidad and Tobago; Dax Driver, CEO & President, Energy Chamber of Trinidad & Tobago; Lorraine Sobers, Lecturer, Department of Chemical Engineering Petroleum Studies Unit, University of the West Indies; and Bobby Gossai, Jr., Senior Petroleum Coordinator, Petroleum Management Programme, Ministry of Natural Resources, Guyana.
“The country has a problem with ethnic rivalry but I think oil and possibly gas may be the glue that brings the ethnic groups together rather than dividing them.”
“Trying to do too much too quickly and promising too much too quickly is probably going to fall short… Everything doesn’t have to be built in a day, it can take time. It should be well-planned and well-structured. Do not focus just on immediate problems, but look at opportunities long-term.”
“CARICOM nations are still very minor contributors to global carbon footprint and climate change, and in 2030 they are continuing fossil fuel production as a funding pathway to renewable energy. So, oil and gas are playing a key role in this economy as they invest incremental portions of their revenue from oil and gas into renewable and sustainable energy in order to meet their renewable goals in 2030.”
“Use this benefit you have today, definitely make the best use out of it but work to develop a diversified economy. Economies that are just dependent on resources are tough economies to run effectively even if they are very wealthy. Take this gift and invest it for the future.”
“Fossil energy is here to stay for some time, but the world is very focused on a decarbonized future and getting there as best as we can, and for society I think it’s a good thing.”
“Guyana has a very bright future in leveraging what’s a essentially a waste product or limited valued product, in the associated gas in those fields. My personal view is economically it doesn’t make a lot of sense for Guyana to invest in refining, these are global markets and you pick what you’re playing in that market. Oil goes to the global market and the current volumes of gas and where it’s located, that’s tough to put on the global market, it may change in the future but right now that gas is a low-value commodity so [instead] bring that to shore.”
“I’m a strong supporter of it [gas-to-shore] and would very much like to see Guyana move forward in that project. It may seem expensive but if you play out Guyana’s future, it could be such a prosperous future and the expense will be nominal compared to the benefits that can be derived.”
“In the renewables future, if you’ve got a system that’s run off of gas, it actually makes it very much able to integrate renewables effectively. A renewable I find very exciting for Guyana is solar. I think it’s an extremely bright future for the country.”
“Electricity is an important part of energy security and they’re intrinsically linked because the cost of energy effects every facet of our modern society, linked to power generation and also the transportation.”
“The good news is Guyana has begun taking steps to move from that state of energy insecurity by becoming a net exporter of crude and low-carbon development strategy [which includes] the gas-to-power and renewable energy.”
“Guyana really needs reliable power generation and distribution, it’s critical to so many services. In the next decade, we’re looking at increased demand, decarbonizing of the power generation, digitalization, infrastructure and its ability to withstand extreme weather events with climate change.”
“Guyana’s power sector has to be reconfigured to meet demand to facilitate the input of multiple renewable energy producers. Multiple producers and variable renewable energy sources would ensure that there’s resilience built into the system so that we have energy security.”
“There is a fight for investment dollars within the major oil and gas producers, there’s a big fight that goes on within those companies about where there capital is going to be allocated, the companies are weary about where’ they’re allocating capital because of climate change and the push for net-zero. They’ve become very disciplined about their capital allocations because of this concern about the long-term demand for oil and gas.”
“Clearly Guyana has been up till now highly attractive, that’s partly because of the structure of the production sharing agreement which is in place.”
“Another thing I would also emphasize is the speed of development, it’s unprecedented how fast Exxon and their partners have gone in working with the government of Guyana from a find to production. This has happened much faster than elsewhere, and that speedy development adds huge value to the resources of a country.”
“This is all about as Roger mentioned, providing the best available public goods to the population. We all talk about people saying, oh, let’s look at Sweden and Finland and say, Well, you know, that’s what they did. They maximize and monetize these resources, made them available as investments, not expensive investments in public goods, health, water, electricity, education and so on. And that then drove innovation, innovation drives development, development provides stability and stability provides reliability, resilience and sustainability. So at the end of the day, what good is having all these resources if you do not provide more and better public goods?”
This webinar was jointly hosted by Global Americas (GA-www.theglobalamericans.org) and the Caribbean Policy Consortium (CPC-www.cpccaribbean.org) featuring regional experts on the state of energy security, GA and CPC fellow Scott Mac Donald moderates the discussion.
Terrence Blackman, Founder, Guyana Business Journal
David Lewis, Vice President, Manchester Trade Ltd. Inc. & Fellow, Caribbean Policy Consortium
Professor Leyland Lucas, Dean, School of Entrepreneurship & Business Innovation, University of Guyana
Andrew Schnitzer da Silva, CCO, Ascending Ltd., Workforce, Marine, Technical Training and Procurement
Richard Ramberran, Executive Director, Georgetown Chamber of Commerce and Industry
“There are a number of issues as it relates to the environment for doing business in Guyana and the way that the environment creates the conditions for competitiveness when juxtaposed alongside more mature economies that have had time to correct some of these market inefficiencies that exist. Take for example, most common is the cost, reliability, and quality of electricity we face here in Guyana. Secondly, of course, is access to finance and rate of interest, and the depth and breadth of the financial sector we have and how competitive we can be in that regard as a private sector…”
“How do we then take what we currently have in place and improve, in a variety of ways, the environment for doing business in Guyana and increasing the competitiveness of the Guyanese firms?…What we really ought to be probing on how can we eventually build an internationally competitive private sector…When we begin to move in that direction, we will really see a lot of benefits that accrue to local content…We will never be irresponsible and advocate for the implementation of local content on something which we clearly don’t have the capacity to do.”
“Since the implementation of local content, I’ve actually seen more persons coming and investing…there is a degree of certainty that exists.”
“I don’t think we need a modern immigration policy in place of the local content act. What I think we need is a modern immigration policy alongside the local content act.”
Professor Leyland Lucas:
“There is no perfect piece of legislation…What has been created as our legislation, will go through several iterations over the years; there will be a number of changes, amendments to this legislations simply because we have to deal with the realities of our environment.”
“One of the critical things for the effective local content policy to really take shape is skills development and how quickly we can ramp up those skills in order to take advantage of the advanced components of local content. It is important for us to recognize that that skills vacuum is not going to be fixed overnight.”
“You have Guyanese experts who are in the Diaspora who have ability to help us in our development…If we are going to engage the Diaspora and allow them to take advantage of local content opportunities, then how do we create a structure that allows them to take advantage of those opportunities without necessarily being present in Guyana.”
“In the Caribbean we talk about ‘free movement of human capital’ but yet we do not see free movement of human capital. So as we expand and deal with this local content issue, we also have to ask ourselves how do we embrace our Caribbean brothers and sisters, no matter where they are coming from and at what levels can they contribute to the overall development of this country…We are at a unique stage where the end is certainly not in sight and so as we deal with those economic migrants, we do need to take a look at our migration policy and maybe make some changes.”
Andrew Schnitzer da Silva:
“There is a big eagerness in wanting to implement these policies or laws and there has to be a transition, an understanding from where the country is and where the country wants to be and what that entails. Lots of times, it doesn’t happen overnight…It has to be an evolving law that understands the needs of the country at any given moment in time.”
“If we stop having international companies that are used to international standards through which we can learn and be permeated by them in order to create a different way of going about business, then it will be very difficult to input that type of rigor or that type of excellence in the way we do business…When skills aren’t present or if skills are lacking, it is very difficult for companies to be committed to these [local content] numbers.”
“Going back to the 51% shareholding structure and the 75% managerial presence in these structures…If companies in-country do not have the expertise and companies have to come from abroad, nobody is going to give away 51% of their knowledge and of their gained experience unless they trust a local partner. In order to gain trust, I believe the best way is through time…it needs to be nurtured and needs to have a conduit in order for it to be successful…”
Panelists discuss Guyana’s emergence as a Petrostate and its implications for the Venezuela-Essequibo controversy.
The presentation made by Prof. Ivelaw Lloyd Griffith, Fellow Caribbean Policy Consortium, Tenth Vice-Chancellor and Principal of The University of Guyana from June 2016 through June 2019, is available below:
Carl B. Greenidge, (fmr) Vice President and Minister of Foreign Affairs, Guyana
“Because of the petroleum issue [and] the issue of the exploration of the maritime space, there’s a tendency by the press which sees petroleum as a more sexy area to focus on this matter as though it is a dispute between Guyana and Venezuela over the maritime space.”
“In the first instance, it does not concern the maritime space, it concerns the land boundary, and the claim by Venezuela in regards to this land boundary amounts to three-quarters (74%) of Guyana’s land surface. I don’t think with the exception of what now seems to be the claim of Russia in relation to […] I’m sure there is no territorial claim that currently exists involves such a demand […] it would leave us with practically no Guyana at all.”
“It needs to be said that that the border between Guyana and Venezuela is a border that also meets with Brazil’s border, at which border is one that had also involved the Brazilian claim on the territory that Venezuela currently claims. We signed a tri-party agreement, which is an agreement that says ‘this is where all borders meet, this is where the three borders meet.’”
”If any one of those countries decides that the borders agreement no longer stands, it is not something that Guyana alone can agree to.” […] “Brazil has never agreed that it will cede territory to Venezuela in that area.”
Dr. Anthony Bryan, Fellow Caribbean Policy Consortium and Center for Strategic & International Studies
“Production of gas in Venezuela has been severely constrained due to its poor investments and the fact that its national oil company has always been interested more in oil than in gas. Despite all of that, Trinidad and Tobago will have to conduct a very skillful game of diplomacy with respect to Venezuela and with respect to the claims over the Essequibo region. We’re not going to falter; we are a CARICOM country and will support Guyana’s territorial integrity.”
Dr. Riyad Insanally, Guyana’s (fmr) Ambassador to the United States
“…The oil and gas economy convergence and why it is important to focus on this, because it has serious implications regarding the challenge to Guyana’s geographic sovereign integrity. While I do agree with Professor Bryan as to the continuation of functional cooperation, the need for vigilance is important because many times, governments fail to defend their national sovereignty because of the slippery slope of the comfort of business engagement with counterparts and the oil and gas energy world is known for this”
This webinar explores how the US-CARICOM Trade and Investment Council (TIC) under the Trade and Investment Framework Agreement (TIFA) of 2013 can be used to promote more focused negotiations between the U.S. and CARICOM. Special focus on the US-Uruguay TIC (2008) as a best practice benchmarking experience with its five times increase in bilateral trade and two times increase in US FDI into Uruguay between 2008-2016 and into the present.
How should Guyana leverage oil and gas revenues to produce a world-class twenty-first-century education system at all levels, focusing on broad coverage of the country and with strong links to the best institutions of higher learning abroad while fostering local skills in key local content areas?
Education and innovations pertinent to industry needs are vital to national development. State leaders must be deliberate in privileging human capital investments, given their connectedness to sustainable economic growth. The education sector and innovations therein are particularly salient for Guyana and the Caribbean as the nation now occupies a seat around the global table of leading oil producers
Dr. Cardinal Warde, considered one of the world’s leading experts on materials, devices, and systems for optical information processing, is a professor of electrical engineering at MIT. Professor Warde is the Executive Director of Caribbean Science Foundation (http://caribbeanscience.org/) CARICOM Research Building UWI Cave Hill Campus, Bridgetown, Barbados.
Prof. Edward Greene, former UN Special Envoy and CARICOM Deputy Secretary General, Chancellor of the University of Guyana.
Prof. Paloma Mohamed, Ph.D., MS AA, eleventh Vice Chancellor of the University of Guyana. She is a full Professor of behavior and communications and is noted as a futurist scholar for her work on change in both humans and human systems. She is the first woman to lead the University in its 58-year history and the first to be appointed Vice-Chancellor at any University in the Anglophone Caribbean.
Dr. Leyland Lucas, Dean, School of Entrepreneurship & Business Innovation at the University of Guyana.
Dr. Terrence Blackman, Medgar Evers College at the City University of New York, Guyana Business Journal
Dr. David E. Lewis, Caribbean Policy Consortium & Manchester Trade Ltd. Inc.
Dr. Paloma Mohamed Martin (Vice Chancellor of the University of Guyana)
“The process of building a technically competent workforce cannot be successful if it is done in isolation from the education systems… The education and training infrastructure must therefore be developed as a true partnership… with the local universities, training institutions, and technical vocational institutes as well as operators and their service providers.”
“We have to scale up. We cannot keep up with the demand for instance for engineers, persons in computing and so on. We are getting huge demand for support services, so international affairs, languages, economics, finance… that support these industries (oil and gas).”
“The human infrastructure of a country is what will sustain a country and what will ensure sustainability.”
Dr. Edward Greene (Chancellor of the University of Guyana)
“One of the most striking paradoxes that we have to take into consideration as we move ahead is the resource curse, of which Guyana must be mindful. Countries rich in nonrenewable natural resources, such as oil and minerals, have experienced according to the overall analysis, slower economic growth than resource poor countries… Our emphasis should be placed on the wider issues of human development… more particularly on human capital development.”
“We must take education as an investment in human development.”
Dr. Leyland Lucas (Dean, School of Entrepreneurship and Business Innovation)
“We need to move away from this obsession with growth and focus on development… Development is what will take this country forward and education is part of the conversation about development.”
Dr. Cardinal Warde (Executive Director of the Caribbean Science Foundation)
“The government needs to get the people involved and get the people to be passionate about the new direction and science and technology and where it can take Guyana.”
“Oil and gas will one day be gone… but I think we will be using fossil fuels for a while… Using the resources that you have to diversify your economy now, and yes, we all agree, education is the key and developing the work force for the future is key towards diversifying the economy.”
The presentation, by Rystad’s Head of Latin America, Schreiner Parker, explores recent developments in Guyana’s oil and gas industry. Parker reports on what has been done so far in governance and identifies what still needs to be implemented to maximize Guyana’s benefits. The report examines how Guyana’s oil and gas industry can compete in a world transitioning from fossil fuels; Guyana’s exploration success and future developments; the long-term sustainability of Guyana’s deepwater oil & gas; value creation for government and companies; and Guyana’s governance of natural resources and its development.
(i) Government Take
The report finds that 2022 is a landmark year for Guyana – with government revenues from oil production forecasted to potentially reach as high as US $1.5 Bn and an average of $3.6 Bn per annum through 2030 (and $12.4 Bn annually between 2031 and 2040). Rystad forecasts the government take to peak at $16 Bn per year in 2036. Cumulatively, this amounts to roughly $157 Bn in government take for Guyana by 2040.
Guyana’s government take (including royalties and profit sharing) is competitive with other frontier and non-frontier regions with an overall take of 59%, including profit sharing and royalties, compared to 47% in Suriname. Guyana also ranked higher than the peer group average of 54%.
(ii) Emissions & the Energy Transition
The emissions intensity of Guyana’s production is nine kgCO2/boe–half of the global average and able to outperform ~75% of global producing assets. This is due to several factors, including larger-scale developments with fewer wells with high rates of productivity, more specialized technical solutions to limit emissions, such as gas reinjection, and more stringent regulations.
Guyana offshore is also one of the most resilient segments under carbon tax scenarios. With taxes of US$50 per tonne, US$100 per tonne, and US$200 per tonne, Guyana’s average breakeven remains resilient due to lower relative carbon intensity compared to other sources.
(iii) Role in Global Discoveries
Guyana has led in offshore discoveries since 2015 with 11.2 billion boe, accounting for 18% of discovered resources and 32% of discovered oil.
Guyana has accounted for 18 of the top 30 largest offshore oil discoveriesglobally since 2015.
Guyana is one of the most competitive supply sources outside of core Middle East and offshore Norway production, beating out the Permian, Russia, and many other offshore sources under various commodity price scenarios, with an overall liquid breakeven of $28.0/bbl. (including future developments)
Rystad expects substantial improvements in transparency as new legislation comes into effect. The country is implementing new governance mechanisms and institutions based on global standards and best practices to manage its natural resource wealth, including passage of NRF Act 2019 and amendment in 2021 and passage of Local Content Act 2021 and operationalizing of the Local Content Secretariat, but more remains to be done.
Schreiner Parker, Senior Vice President & Head of Latin America, Rystad Energy
“Guyana’s emissions intensity is only half of the global average…Guyana’s emission intensity for producing assets actually outperforms almost 75% of global performing assets. This is significant and very important in terms of being part of that supply source in the long term.”
“If we fast forward to 2035, Guyana becomes the fourth largest offshore oil producer in the world at 1.7 million barrels per day of production outpacing traditional offshore provinces like Norway, the United States, the United Kingdom and Mexico.”
“Guyana will go from a frontier exploration player to a top five global exploration producer in the next five years.”
“Guyana is very well positioned in the government take aspect and actually higher at 59% than the average for the peer group being 54%… The Guyana government take, which we estimate will reach $7.5 billion per year by 2030, and again that $157 billion by 2040 cumulative. It is important to note that in these estimates we are only talking about the Stabroek Block.”
“Guyana has an oil industry that is sort of less than ten years old and yet it is scoring materially higher than Mexico, who has an oil and gas industry that is more than 100 years old. So I think what we can really show here is that Guyana is taking the right steps to ensure that good governance is a staple of the development of the oil and gas industry and that the benefits of this resource will go to the Guyanese population who are, at the end of the day, the rightful owners of this resource.”
Joel Bhagwandin,Director Corporate Finance Advisory | SPHEREX Analytics SPHEREX Professional Services Inc.
“The story is essentially the same, which is the government essentially will earn more in terms of profit and royalties versus the oil companies (regardless of approach between looking at all of Stabroek Block or just the four approved projects).”
“In the area of transparency I would say, in the circumstance given our situation, we are doing fairly well. The production sharing agreement is a public document, the production sharing agreements of other exploration that are ongoing with other companies are public documents.”
Arthur Deakin, Energy Practice Co-Director, American Market Intelligence
“If it (associated gas) is 20% of the 11 billion barrels of oil equivalent that have been discovered that would equal, more or less by our calculations, 13.2 billion cubic feet of associated gas which would make Guyana have the third largest gas reserves in Latin America, behind Venezuela and Argentina.”
“These (infrastructure) projects have been part of the plan for many decades, but now that Guyana actually has the money, or has the money coming in, it’s really time to implement it.”
Founder, Guyana Business Journal
Vice President, Manchester Trade Ltd. Inc. & Co-Chair and Fellow, Caribbean Policy Consortium
Kemraj Parsram, Executive Director of Guyana’s Environmental Protection Agency (EPA). A graduate of the University of Guyana with a Diploma in Forestry (1992-1994), and Bachelor of Science, Environmental Studies (1994-1998), he also graduated with a Master of Science in Natural Resources Management (2001-2003) from the University of the West Indies, Cave Hill Campus. He has pursued academic research and field studies at the Doctoral level in Marine Resources Governance (2008-2013) at the University of the West Indies, Barbados. More recently (2018), he received a Post Graduate Diploma in Environmental Law and Policy from the University of New Delhi. He is an expert in the fields of environmental and natural resources management, law, policy, and governance in the wider Caribbean.
Dax Driver, President and CEO of The Energy Chamber of Trinidad and Tobago. Dr. Driver has been the chief executive of of The Energy Chamber for more than two decades. During his tenure he has overseen the complete transformation of the organization into an extremely well respected and recognized Chamber, with a reach across the entire Caribbean region. He has extensive knowledge of the energy industry and the policy issues impacting the sector, especially in small island and middle-income economies, and the impact of industry on the economy, society and the environment. His is a strong but unusual academic background for somebody in his position. He holds a PHD from the University of London in environmental history of Southern Africa. He is passionate about bringing value to the member companies of the Energy Chamber and especially in helping them navigate the challenging environment and the uncertainties brought about by the energy transition.
Lorraine Sobers, Fulbright Scholar and Lecturer at the University of the West Indies, St. Augustine. Dr. Sobers has a BS in Chemical Engineering and postgraduate degrees, MS and Ph.D. in Petroleum Engineering. She has 19 years of experience in the energy sector and specializes in geologic storage of carbon dioxide. Dr. Sobers is the Project Coordinator for the Carbon Dioxide Emission Reduction Mobilization (CERM) Project and a Fellow of the Caribbean Policy Consortium,
Neville Trotz, Dr. Trotz served as Dean, Faculty of Natural Sciences at the University of Guyana and Director of the Institute of Applied Science and Technology at Turkeyen, Guyana, before becoming Science Adviser to the Commonwealth Secretary-General (1991-1997). Most recently he served as Science Adviser to the Caribbean Community Climate Change Centre, based in Belmopan, Belize.
The Global Americans and the Caribbean Policy Consortium hosted a conversation with Georges Fauriol, David Lewis, Amparo Mercader, Richard Feinber, and Alicia Nicholls. Panelists assessed the IX Summit of the Americas from a regional perspective and compared this summit to summits past. Georges A. Fauriol offered opening remarks, and Guy Mentel moderated the conversation. See full video below.
Georges Fauriol began the event with an opening presentation, summarizing the outcomes of the Summit of the Americas, held last month in Los Angeles. Even before the summit took place, it had already generated controversy among regional leaders due to the exclusion of Cuba, Nicaragua, and Venezuela. Several of the initiatives launched at the summit—including the Americas Partnership for Prosperity, the U.S.-Caribbean Partnership to Address the Climate Crisis 2030, and the Los Angeles Declaration on Migration and Protection—risk becoming little more than “policy by pronouncement” unless countries follow up with proper implementation.
Following Fauriol’s comments, Guy Mentel moderated a discussion among the panelists. The conversation covered climate change mitigation and adaptation, trade and investment, nearshoring, regional integration, immigration, energy, and the crisis in Haiti, among other topics.
Guy Mentel – President, Global Americans
Georges Fauriol – Global Americans Caribbean Fellow and Co-Chair, Caribbean Policy Consortium
David Lewis – Co-Chair, Caribbean Policy consortium
Amparo Mercader -Partner, PwC
Richard Feinberg -Professor Emeritus, UC San Diego and Member of the Global Americans International Advisory Council
Alicia Nicholls -Research Fellows, Shridath Ramphal Centre for International Trade Law, Policy, & Services
Georges Fauriol: “Often the side-shows at summits (between varying actors like NGOs and the private sector) are quite positive for building consensus. Particularly for the Caribbean at this summit, on food and energy security.”
Georges Fauriol: “[The IX Summit of the Americas] furthered a U.S. tendency of instituting policy by pronouncement.”
Alicia Nicholls: “[The fact that] Cuba is one of the largest sources of immigration to the U.S. provides some context as to why some Caribbean governments insisted on Cuba’s inclusion at the summit.”
David Lewis: “[For Southern Caribbean countries,] climate change is an endemic, existential threat, but that these countries need income, jobs, and opportunities today. Those needs must feature in any diplomatic discussion.”
Richard Feinberg: “[At the first Summit of the Americas in 1994,] Argentina led the call for the [Free Trade Area of the Americas], Brazil championed democracy promotion, and Honduras and Venezuela put forward proposals on corruption. How have things changed since.”
Richard Feinberg: “I give points to the administration for not focusing on China. It was never explicitly brought up, and they deserve credit on that.”
Amparo Mercader: “If the U.S. cannot agree on [a free trade agreement]; customs agreements, services promotion, and double-taxation agreements would be welcome compromises.”
Amparo Mercader: “Nearshoring is as much a political as a business move. It builds resilience and diversifies resources, just in case. Many U.S. companies are diversifying resources away from China, but instead of relocating to the hemisphere, [they’re moving] mostly to other Asian countries.”