IDB President backs Guyana’s oil development path


(Jamaica Observer) – Guyana may have discovered commercial deposits when the world is transitioning to green energy adoption, but president of the Inter-American Development Bank (IDB) Mauricio Claver-Carone believes the South American country can utilise the revenues from its recent discoveries to become a developed country, following the Norwegian model.

During a press briefing earlier this week, Claver-Carone outlined that one of the strategic objectives of the hemispheric bank is to help Guyana “to exploit these resources in a way that benefits its population in a way that is sustainable and inclusive”.

Responding to a question on the IDB’s position to encourage Suriname and Guyana to produce oil and gas, thus contributing to the negative impact of climate change, the president said it “would be unfair” to punish the South American countries for making discoveries in the 21st century.

“We have a unique opportunity here to help a country undertake that entire development path like Norway did. We want Guyana to be Norway,” he argued.

“We don’t want it necessarily to be the Middle Eastern and African models that have actually seen development,” Claver-Carone continued.

Guyana has been the scene of the world’s biggest offshore discoveries since 2016, with 10 billion barrels of recoverable oil and gas from over 20 discoveries. Since 2019 the country has been producing crude from the Liza 1 well in the Stabroek Block, adding the Liza 2 well to its output earlier this year.

While ExxonMobil and its partners Hess Corporation and Chinese-owned CNOOC are the only producers in Guyana now, other oil exploration companies have made discoveries in the Kaieteur and Canje blocks.

The World Bank projected in June 2021 that Guyana’s economic growth would be about 26 per cent this year. In January, however, the Government of Guyana forecast 47.5 per cent growth, driven by oil production.

Suriname, on the other hand, has had fewer discoveries in its Block 58 and has yet to begin production.

Claver-Carone pointed out that just as countries in Europe, the Middle East, and the Americas could exploit their discoveries of oil in the last century, Guyana and Suriname should be given an opportunity to do the same.

“It’s not our fault that now Guyana and Suriname have discovered these resources in the 21st century when the rest of the world is moving towards a transition to green energy and ensuring that whatever resources will have the least climate impact possible and eventually zero climate impact,” he said.

The IDB president shared, however, that the bank has developed a novel approach in which both countries can pursue oil and gas exploration and production simultaneously with a transition to renewable energy. Having “learnt the lessons of the 20th century”, Claver-Carone said that there are “offsets and balances” in the new structure to ensure that Guyana and Suriname transition to cleaner energy and fulfil its sustainable development goal (SDG) commitments.

As set out by the United Nations, the 17 SDG’s aim to balance economic development with environment. Goal 7, for example, sets out to achieve affordable and clean energy, while goals 11 and 12 target having sustainable cities and communities and responsible consumption and production, respectively.

“…We’re helping them in that process without punishing those populations or depriving their populations from the potential development that income can have on [them] becoming the largest per capita oil and gas producers in the world,” the IDB head pointed out.

He lamented that while countries in the region, specifically South America, have had oil and gas discoveries in the last century, they have not democratised the fortunes from those resources to their populations, neither have they capitalised on becoming developed states.

“Here, our goal is for Guyana to be the Norway model, and if we can help them to do that successfully, it would be the first in Latin America and the Caribbean. We can help a country through its entire development phase and we can do that at a time while helping it through its green transition,” Claver-Carone reiterated, adding that Norway is now a champion in green energy.

Given Norway’s success, he said it was possible to do the same with Guyana and Suriname.

“…And it’s incumbent upon us and it behoves us to get it right,” the IDB president stressed.

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