Earlier this year, the news came that Exxon Mobil had found oil offshore Guyana. It appears to be a major find. The news created a sense of euphoria among Guyanese. This discovery came during the tenure of the previous government and immediately, the then President Donald Ramotar arranged for a series of seminars to prepare the nation for the impact of an oil economy.
It was the same after the government changed. The new government went further. It sought foreign help to deal with the possibility of oil on the small population. There have been seminars and workshops.
The Canadians have gone even further; helping the government to consider establishing a reserve fund that would not only help to curb rampant inflation and runaway spending but would also help the country to make the best use of the windfall.
The Exxon Mobil Corp. discovery in the Atlantic Ocean off Guyana may hold oil and natural gas riches 12 times more valuable than the nation’s entire economic output. And this could have a significant impact on the business sector.
One business entity, Mings Products and Services, is a major supplier of outboard engines, vehicles and equipment commonly used in the agricultural sector. Oil would certainly have an impact on such a company given the anticipated expansion of the economy.
Mr Colin Ming, a Director of the company, has however warned about too high expectations at this time. “No one will be able to capitalise on any oil before 10 to 15 years. We should not fool ourselves into believing that there would be a radical change in the near future.”
He said that there would be an opening of business opportunities that never existed but until then, sales and the other aspects of business would remain unchanged. Mr Ming said that while the immediate impact appears distant, his company has been making preparations. Just recently, two of the senior managers travelled overseas to participate in seminars on what should be done if oil comes.
Tandy’s Manufacturing Enterprise sees a change that could only boost the fortunes of the company. Mr Kirt Denny, one of the founders, said that for one, electricity rates would go down astronomically. “Our company relies heavily on power, the cost of which is very high at this time.
The production line is often affected by the spate of blackouts. The outages also affect machinery. Yet the company is already sourcing new and additional equipment to enhance production and ensure faster delivery. Mr Denny said that his entity is also seeking to expand the physical space. The company is situated in the Ruimveldt Industrial Site. “There are vacant lots in this industrial site but when we pursue acquisition, we are told that these lands are owned by others.
Mr Denny said that he has been in discussion with some overseas associates who are also seeking land in the industrial site for their headquarters. He said that there is no mad rush to do anything at this time because it could be a case of premature investment.
Air Services Limited, one of the two major domestic airlines servicing Guyana’s hinterland, plans to expand its base because it recognises the benefits that would accrue from an oil economy. Director, Mrs Annette Arjoon-Martins said that long before there was talk about any oil discovery her company applied for additional land to construct additional hangars at the rapidly developing privately owned and operated regional suburban Ogle Airport.
Trans Guyana Airways, the other of the two major domestic airlines, is contracting with UK company, Bristow Helicopter, to provide ground handling services at Ogle Airport in support of Exxon’s expected oil find in Guyana.
Mines Services Limited with its capacity to supply heavy motors and heavy duty electrical spares is also poised to take advantage of the developments that would precede the oil exploration and recovery.
The fact is that while an oil economy may be some distance away companies are making certain preparations. Some of them say that to wait until later could prove costly, far too costly.
Oil will result in major infrastructure development said Ms Carrissa Goodings, Project Engineer of B&J Civil Works, in the heavy construction industry. She said that oil would mean more investment and expanded construction.
“At present, we have one road leading to and from the major airport. That will not suffice in an oil economy. For example, there is the Guyana- Brazil road which could be constructed now that the country would not have to borrow extensively from external lending sources for infrastructure development.”
She said that companies like hers could begin to acquire larger equipment to undertake even larger projects.
At the same time, her company would have to consider sending its engineers for further training so that they can be in a position to position themselves to perform at a higher level.
One construction that B&J Civil Works intends to undertake is a deep water harbor which would be a necessity in the coming years. “We are going to be training more engineers. It is going to be a worthy investment.”