Guyana prepares for major policy changes in energy sector

President Irfaan Ali of Guyana, made use of the four-day Guyana Energy Conference and Supply Chain Expo 2024, to announce a major shift in the nation’s policies with regards to the oil and energy sectors.

While speaking at the opening ceremony of the event, he asked investors to remain open to the changes being introduced and follow the administration into a new era that looks to move beyond the traditional practices in the energy and oil sectors.

During his speech, President Irfaan Ali stated the following, “We are meeting at a different conference from last year because very importantly we have added the supply chain to this conference and it is not added to this conference to prolong the title of the conference, it is added because there is an important shift from a policy perspective, from an investment perspective and from a development perspective.”

President Ali assured investors that as Guyana continues along this new path in the energy sector, “it is important for us to understand the role, logistics and transport system investment will play in the building out of our economy, but more importantly in the complete integration of our economy with CARICOM, South America, the Dominican Republic and further afield.”

He went on to say, “This is the priority, ensuring that the economy is fully integrated within our region.”

This statement was meant to shed light on the fact that the changes being introduced are beneficial for all the parties involved in the sector but can only take effect to the fullest if the market is open to receiving them and benefiting from them.

President Ali was adamant that this new approach has the potential to help establish supply chain mechanisms that will bring a positive change to the entirety of the CARICOM region by pushing for a more holistic form of development in the region.

President Ali added, “If we can define our market space within the region itself then it points to very low-hanging fruits but we have to build the infrastructure to facilitate this.”

A great example of this, which President Ali mentioned himself, is the government of Guyana’s plan to reduce electricity rates in the nation by a staggering 50% by making use of the gas to energy projects for the benefit of the people.

The government has made reasonable estimates which make it clear that the new natural gas plant will produce more electricity over the next decade than Guyana Power & Light customers will have the ability to use. The project is to receive funding from the US oil and gas giant ExxonMobil, amongst other sources like the US Export-Import (Ex-Im) Bank, which will cumulatively provide more than two billion USD in the form of investments to this initiative.

President Ali spoke of the ever-increasing interest that the project is garnering from investors, which has led to such rapid development that the gas coming in due to the second phase will require a second power plant, which highlights the immense potential this initiative presents.

He also stated the following, “That is based on just the interest in manufacturing, in industrial development, in agro-processing. The growth in demand of power is going to be enormous because we are going to propel that growth by the fiscal incentive regime and the investment drive we are going to push forward for manufacturing, industrial development and agro-processing.”

Guyana is also looking to export large quantities of propane gas as the project is expected to produce 4,000 barrels at the very least, daily. This is far beyond what the nation requires as it only makes use of 800 barrels per day.

Considering this, Guyana will have the ability to meet the needs of neighbouring nations such as the Dominican Republic and Brazil, which will be of great monetary benefit to the nation.

When the project begins to function at full capacity, it will produce roughly 10,000 barrels per day. This is why President Ali added that “We are now building out the road to northern Brazil…all of that investment we are already making so that market becomes immediately available.”

“That means for us even with a growth in our demand, we will have 9,000 barrels a day ready for export. This translates to us being able to fulfil to a large extent all of CARICOM needs.”

With regards to those who have questioned the government’s focus on building roads and bridges, President Ali said the following mockingly, “This is the link between investment. So when people ask why build roads why build bridges, this is the economic link that it creates. If we don’t have it, we will sit on 9,000 barrels of propane gas and it can’t hatch.”

“This is the critical link for the opportunities it opens up for our country” Ali said, citing the many benefits these initiatives will bring to the region, including increased job opportunities in Guyana and other nations in the vicinity.

“I want to reiterate my position to you today that development in Guyana, especially in the energy sector, must and will benefit the region. We are now working on the overall gas strategy.”

“The way we see this gas development unfolding is through which it will be highly integrated into the investment and it will be an important pollster for the investment in the deep water port and the connection to northern Brazil.”

He also spoke of the benefits that CARICOM nations will be able to avail, “That will open tremendous opportunity for transport, logistics for every conceivable stream of cargo.”

Ali told the gathering that, “I don’t think I have to go over the story of oil, you guys have the numbers, the only thing I could tell you the numbers are growing…and oil and gas are here for a pretty sustained period.”

President Ali also mentioned that these developments will allow Guyana to improve itself in terms of food security and increase exports of bauxite as well.