The Guyana government could rake in about US$200 billion (or nearly GY$42 trillion) in revenues by 2050, largely due to the oil and gas sector, according to Energy Expert, Professor Anthony Bryan.
Professor Bryantouted the transformational capacity of Guyana’s oil wealth- if managed well- during a recent virtual oil and gas conference.
“In 2018, Guyana’s total government revenues were just US$1.4 billion.
“Now with rapidly expanding oil and gas operations, this is estimated at US$50 billion to US$200 billion through 2050,” the Professor declared.
Of that sum, he said that if all of Guyana’s oil discoveries were developed in the next 20 years, Guyana could earn over US$120 billion from just the production sharing agreements and royalties. This amount can increase significantly with more oil finds.
He, however, cautioned that the country must carefully manage the windfalls or face the consequences that many countries have grappled with before.
“The explosion of money might be difficult to absorb and manage, the possibility of political and ethnic strife is always a concern (and) inflation can rise, stifling the development of other industries,” he said while listing adverse consequences Guyana may be confronted by.
People’s expectations, he also noted, must be managed.
Yet another consideration was that the government could plunge Guyana into debt unless it manages those revenues cautiously.
This is particularly necessary since, as he says, Guyana has managed its debt “quite prudently” over the past two decades.
To counter these challenges, he provided a laundry list of solutions – chief among which was the focus on expanding the agricultural sector.
In fact, he said crucial investments are needed to fulfil the Caribbean Community’s (CARICOM) vision of Guyana becoming the region’s “breadbasket”.
“It’s not a new idea, but it’s an idea whose time has now come,” the Professor said simply.
Additionally, he said that expansion of gold and bauxite mining may be crucial sectors wherein the country can wean itself off of the dependence on oil and gas revenues.
Continuing on the extractive industries, he even said that consideration can be given to the production of uranium (which was already discovered locally) and other rare earth materials.
While he hopes that the country will pursue these sectors, he agreed with the country’s move to use its natural resource wealth to fund diversification efforts and a transition to cleaner energy.