'Sea of dreams.' Guyana's prime minister addresses its oil boom — and its Venezuela crisis
Prime Minister Mark Phillips sees no contradiction in Guyana being both a fossil-fuel leader and a climate-change mitigator. But will Venezuela try to grab its oil?
In just the past six years, the small South American republic of Guyana has become potentially one of the western hemisphere's biggest oil producers. It's also one of the world's leading voices on climate change mitigation.
Guyana today is a refuge for migrants from neighboring countries like Cuba and Venezuela. It's also embroiled in a territorial dispute with Venezuela that's got security experts worried about a more serious conflict.
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WLRN’s Tim Padgett spoke about Guyana's changing, rising profile with Prime Minister Mark Phillips during his recent visit to South Florida.
Here are excerpts from their conversation, edited for clarity.
WLRN: Prime Minister Phillips, you're here at the invitation of the Guyanese American Chamber of Commerce, based in Miami, and the Doing Business with Guyana Conference here in Miramar. A decade ago, a lot of people might not have thought of Guyana as a particularly robust place to be doing business. But over the last six years, there have been dramatic oil discoveries off Guyana's coast…
PHILLIPS: Just above 10 billion barrels with the most recent find…
Right. And some might ask why it took Guyana and international companies like ExxonMobil so long to find all that oil.
Well, in years past, the offshore technology wasn’t as fully developed and was much more expensive. [Former Guyanese] President Janet Jagan actually signed off on the exploration back in the 1990s.
By 2025 Guyana's share of the export revenue is expected to be more than $5 billion. Foreign investment in the sector is nearing $1 billion. Help us understand how an oil boom like this affects the psyche of a small country like Guyana.
Well, you know, it's a good feeling to be in political office managing this whole sense of euphoria. Guyana is the fastest growing economy in Latin America and the Caribbean now [estimated 26% GDP growth in 2020] and in another 10 years’ time we will be perhaps the highest per capita oil producing country in the world.
You know, it is like a sea of dreams realized — all that we were hoping for we can now achieve, you know. Better housing, better education, better health facilities for the people.
But history has shown — in Venezuela, for example — that it could lead to a lot of corruption and a dangerous over-reliance on oil revenue. How does Guyana plan to do its oil boom smarter than other countries have?
We have to ensure that issues of corruption are dealt with and ensure responsible government — the manifesto that got us [the People’s Progressive Party] elected last year — and it is our intention to utilize the revenue from oil to improve the diversity of our economy.
For example, we have our low carbon development strategy. As you know, about 80 percent of [Guyana] is covered by [rain] forests. So the strategic plan is that a large percentage of the oil revenue will be utilized to transform from nonrenewable to renewable energy. Solar, hydropower, wind.
Some people might argue you seem bent on putting your own oil boom out of business…
[Laughs] No, no, we're not putting our oil out of business. But we’re cognizant, you know, that in another 20 or 30 years, oil will be on the decline and there will be more renewable energy use around the world.
Guyana could be the world's top per capita oil producer, but we'll utilize that revenue to develop renewable energy — we're cognizant that in 20, 30 years oil will be on the decline.Mark Phillips
It's interesting that Guyana wants to be a fossil fuel leader right now, but it also wants to be a leader in addressing global warming. Your head of state, President Irfaan Ali, recently said Guyana will step up its presence in the carbon credit market, meaning countries that produce a lot of greenhouse gases pay Guyana in exchange for it protecting its vast rainforests.
We've utilized that to promote sustainable development — and sea defense, because the coastline of Guyana is below sea level. We have to invest as a country in massive sea wall infrastructure, just to basically keep the water out during high tides.
We can definitely identify with that in South Florida. But how can you really enforce protection of your rainforests — something Brazil next door, which has a lot more resources, can’t even seem to do?
We have a good deal of legislation and regulatory practices…
So does Brazil, in theory…
…that promotes sustainable extraction of timber from Guyana’s forests. We have forestry commission rangers out there ensuring the regulations are observed. Before logs are exported, for example, they have to be rigorously checked, right?
We obviously have to talk about Venezuela's insistence that about three quarters of Guyana's territory belongs to Venezuela. This stems from a dispute about the drawing of your border back in 1899. Many people argue Venezuela is pushing this because it wants Guyana's oil — and Venezuela has actually been rattling sabers over this, like using its navy to harass oil ships off Guyana's coast. You're a former military leader in Guyana. Do you worry this could turn into an armed conflict?
I have no reason to believe that it will turn into full-blown armed conflict. However, we cannot be complacent. We have to continue to monitor Venezuelan military actions and keep the international community informed. The dispute was settled in 1899; Venezuela signed that [border] treaty. Now it's placed before the United Nations’ International Court of Justice, and Guyana believes that international law should be the only avenue for settling it.
But, really, why does Venezuela want more oil when they already have the largest proven reserves in the world? They should focus on [better producing] their own oil resources for the benefit of their own people.
Some suggest it’s because so much of Venezuela’s oil is heavier, harder-to-upgrade crude while Guyana’s is lighter, more refineable. But it seems one of the ironies here is that Guyana has taken in tens of thousands of refugees escaping Venezuela's humanitarian crisis, which is due in large part to the mismanagement of its oil industry.
The conservative estimate is that there are about 40,000 of them in Guyana [equal to 5% of Guyana’s population]. They are in fact running from a deteriorating economic and social situation in their country and we have an obligation to ensure that they are looked after once they are in Guyana.
At the same time, Guyana is also the focus of illegal gold mining, and a lot of that ends up being trafficked here in South Florida. Recent reports suggest gangs have strengthened their control of border mining areas. What steps is Guyana taking to rein that in today?
Our Geology and Mines Commission is working overtime to deal with this whole issue — more operations and arrests. Recent reports also suggest there’s been a reduction of smuggling of gold out of Guyana and that more people are selling it on the Gold Board that’s been set up.
There is a sizable Guyanese diaspora here in the U.S., including South Florida, especially Broward County. How are they helping you leverage the new international interest in doing business with Guyana?
Anywhere you find Guyanese — America, Canada, wherever — there’s always that connection with home, and in the past the funds they repatriate to Guyana was often the highest contributor [to] our GDP. Now they can talk, not just about the potential of doing business in Guyana, but about actual opportunities. That’s what we brought to this conference here.
And I hear you’ve been checking out the Guyanese restaurants here, like the Bamboo Fire Café in Delray Beach. Any dishes to recommend?
Oh, I don’t want to take the risk of discriminating against any of them — the fish in banana leaves, the meat balls, the curry, okra fried rice and shrimp, dhal pea soup. It’s Indian, European, African, Chinese and our Indigenous groups, because you know people came from all over the world to work in Guyana’s sugar industry. We’re a real melting pot.