I am pleased to be part of this Guyana Basin Summit. The Summit is driven by the high interest being expressed about Guyana’s future and the vast opportunities which the country’s economic transformation will unleash over the next decade and beyond.
Indeed, this shared prosperity is not only within the boundaries of Guyana, but the tremendous potential that lies in our neighbour Suriname also.
Guyana is set to become an economic and energy epicentre in the Western Hemisphere. It is also destined to emerge as one of the most diversified regional economies, providing a treasure-trove of economic opportunities. The country will be propelled not only by oil and gas but by other sectors including manufacturing, knowledge services, health services, digital technology, agriculture, tourism and aquaculture. These sectors will complement the traditional sectors which are being modernized and which will retain their role as economic mainstays.
This dynamic transformation will be driven principally by the private sector. Local and foreign businesses, working in tandem and sometimes in partnership, will act as the main driver of economic output efficiency and competitiveness.
Our intention is to work with local and international investors in every dimension of this economy so as to ensure thriving economic sectors over the next five (5) years and beyond.
We have made a good start thus far. By the end of 2020 – a mere four months after assuming office – we have already rekindled investor and consumer confidence. We reversed some of the burdensome tax measures, specifically targeting the mining, agriculture, manufacturing, and services sectors. We have implemented measures to stimulate business development, especially in light of the contraction occasioned by the pandemic. The economy grew by a staggering 43.5% mainly on account of oil production.
This year, we will continue to fashion a stronger, more resilient and investor friendly economy. In our National Assembly, we have just passed our annual Budget which manifests our commitment to human safety, dignity, attracting large-scale private investment in the traditional and newly-emerging sectors, investing in transformative infrastructure, developing world class services, including social services, and laying the groundwork for structural transformation. Indeed, what you will in the next five years is an explosion of housing construction, and the foundation being laid for manufacturing and industrial development.
Our outlook for this year and beyond is extremely promising. Guyanese can anticipate continuous and progressive improvements in their living standards. The economy will expand and become more competitive, and business will thrive. Investors will enjoy increasingly greater opportunities and rewards.
Of course, the oil and gas sector is going to be instrumental in our national development framework. But our development plans, as I have indicated, do not revolve exclusively around oil and gas but involve all sectors of the economy.
The Government, as I have said continuously, is committed to establishing both a conducive and enabling environment for business development. By ‘conducive’ I mean the broader regulatory, fiscal, monetary, infrastructural, and institutional framework which will make Guyana attractive for investment and a good place to do business. By ‘enabling’, I refer to removing all obstacles which investors face so as to allow them to fast-track investment decisions.
Government is mindful of its own role as a partner in national development. Our plans, as a government, stretch from large-scale agricultural investments and related projects to mega infrastructure which includes bridges, a road to Brazil, a deep-water harbour, housing, communities and urban centres, port facilities and digital technology backed industrial parks and energy development.
For a matter of fact, we have commenced discussions with Suriname, our neighbour, in the development of the Energy Corridor; Brazil, and French Guiana too will play important roles in that development, where we are going to develop one of the most competitive energy corridors along the Guyana shield.
A major catalyst for industrialization will be the planned gas-to-shore energy project. This will afford our Guyanese economy the opportunity to have an enhanced manufacturing sector and allow Guyana to become an industrial powerhouse, a model energy state, the breadbasket of the Region, the Silicon Valley of the Caribbean, and a sustainable tourism paradise.
The development of our natural resources is key to unlocking this planned economic prosperity. As I said in my address to the country’s National Assembly:
Guyana is blessed with an abundance of natural resources that provides opportunities for every Guyanese. Few other countries in the world can boast of being home to gold, diamonds, bauxite, sugar, rice, cattle and other livestock, forestry, oil and gas, abundant agricultural lands, freshwater, and tourism. There is no reason for our country to be poor, or for our people to want. We, together, have to take hold of these natural resources that have been gifted to us and turn them into national treasure.
We are clear on the fundamental principles which will guide the development of our natural resources sector. And we want prospective and potential investors to have a similar clarity.
Our natural resources are part of our people’s patrimony. As such, these resources must be used for, and rebound to, the benefit of the people of Guyana. This is the fundamental starting-point for the development of our natural resources. And it underpins our policy resource development model.
The country’s resources however, are useless to us if they remain unexploited. Foreign and local capital is necessary to convert our natural resources into wealth and to generate jobs. As such, Guyana welcomes private investment. Without such investment, we will remain poor and vulnerable.
Investment remains pivotal to shared prosperity. We simply lack the scale of financial, technological and human resources needed for our ambitious economic development plans. We need investment to drive our development.
Our local private sector will not be undermined. We want our local private sector to become more involved in the planned economic transformation and to grow and develop through synergies and partnerships with foreign businesses.
It is for this reason that we are developing a draft local content policy and law. This policy and law are not intended to be a disincentive to investment. Rather it is aimed at spurring a stronger and more robust local business environment.
Our natural resources must be developed sustainably. We are committed to ensuring a model of development which provides benefits for present and future generations. We will not sacrifice long-term benefits for short-term gains.
However, neither will we miss the opportunity to maximize gains, especially in instances where only a narrow window exists for such gains to be derived. We have to make the best of the best of times.
We are uncompromising when it comes to respecting our people, especially our workers. We insist that the rights of our workers be respected and that investors comply with our labour laws.
I know that while this Summit is not necessarily confined to oil and gas, the sector will become a focal point during your deliberations. In this context, the Guyana Basin is an important national resource. In terms of endowment, we have estimated that total Basin potential is around twice our proven reserves. Economically, this is important and further solidifies our position as a lucrative emerging petroleum state.
We intend to maximise the many business opportunities that exist along the value chain of our fledgling petroleum sector, and of course expand drilling, exploration, and production activities in our petroleum sector.
The Stabroek Block has a proven reserve of around 9 billion barrels of crude oil. The geological formation of the block makes it one of the most lucrative and prolific blocks in the world. This year we expect an additional 10 exploration and appraisal wells to be drilled. Overall, our exploration rate has been quite successful at 80% with 18 discoveries.
Liza Phase 1, the first oil field to be developed, has already achieved its nameplate capacity of around 130,000 barrels of oil per day. Liza Phase 2, the second field to be developed, is expected to commence production next year 2022. By the end of 2027, we are expecting at least seven FPSOs operating in the waters of Guyana, with a daily production level of well over a million barrels.
Guyana Basin Summit
We welcome investment in the Guyana Basin as well as the multiple opportunities it will spawn within our economy. This Summit is an opportunity for investors to cement their participation in our economy, including in the non-oil sector.
I welcome all of you who are participating virtually in this Conference. I am confident that we will, by the end of this year, be able to meet face-to-face for such events. But I do invite you to come and do business in the most exciting investment destination in the western hemisphere, Guyana.
I want to take just a few moments to say to all potential investors that you need to come, you need to explore, and you need to look holistically at the varied opportunities in Guyana. Whether it is large scale agriculture production, whether it is mining, whether it is forestry, whether it is in the healthcare system, the education system; you need to understand the varied opportunities Guyana offers for different types of investors. It is not only about oil and gas, oil and gas has really brought attention to Guyana, a sleeping giant in investment opportunities.
We welcome you and I wish every success to this Summit.
I thank you.