2024-05-04 01:51:01
Some call Guyana Dubai of South America, others talk about the economic miracle of South America. The fact is that Guyana can expect economic growth rates of up to 25.4 percent this year and is therefore at the forefront of economic development in Latin America. At least, that’s what the latest report from the UN Department of Economic and Social Affairs says.
This arouses interest, especially from her neighbor. Venezuelawho want the region of Essequibo, rich in oil and raw materials. The socialist government of Nicolás Maduro has already published new maps showing a wider Venezuela, including the aforementioned region.
A rapidly growing oil industry
The main reason behind the economic boom is the rapid growth of the oil and gas industry in Guyana. “Guaiana chose private actors with broad powers to carry out this type of project,” analyst William Clavijo, from the University of Rio de Janeiro, said recently that Guyanese’s path is against the strategy it follows in Venezuela.
Venezuela’s state oil company, PDVSA, has been in steady decline for the past two decades. Specialists have been replaced by loyal staff who have the “right” party credentials, but do not have the necessary skills In addition to this there are cases of corruption and mismanagement Guyana clearly won the duel between a planned economy and a market economy.
The oil companies operating in Guyana have qualified workers with knowledge and experience in the sector. Almost ten years ago, the American oil company ExxonMobil made one of the largest oil discoveries in recent history. In the so-called Stabroek block alone, up to eleven billion barrels of oil are estimated (one barrel is equal to 159 liters). Since then, the country’s development has only known one direction: upwards.
“On the one hand, it is clear that Guyana wants to continue to exploit its oil reserves without the threat of international conflict. On the other hand, the government of Venezuela has used the centuries-old conflict as a political distraction in its failed attempt to overcome the lack of public support,” says Carolina Jiménez Sandoval, president of the NGO WOLA (Washington Office for Latin American Affairs), in a conversation with DW. “In any case, both countries should use conflict resolution mechanisms to resolve their differences peacefully,” he says.
Market situation
In addition to the political component, Guyana’s economic rebound naturally also has economic effects. Recently, geopolitical conflicts such as Russia’s war against Ukraine or Hamas’s attack on Israel and its counter-reaction in the Gaza Strip have caused turbulence in the oil market, as sanctions or changes in the oil market became on the cards. A new pro-Western actor could calm the markets in the medium term and guarantee better security of supply.
It already surpasses Venezuela
Guyana, with just over 800,000 inhabitants, already has a higher per capita output than Saudi Arabia. ExxonMobil has announced that Guyana’s oil production will increase from 380,000 barrels per day in 2023 to 640,000 barrels per day in 2024. The goals are ambitious: Guyana says it wants to produce a total of 1.2 million barrels in face of the day in 2027.
In comparison, Venezuela, the world’s richest country in terms of oil, produces only 700,000 to 800,000 barrels per day and Guyana is likely to take it soon. According to expert estimates, Venezuela has proven reserves of almost 300 billion barrels. But, in addition to the disastrous management errors of Caracas, the United States sanctions also contribute to the poor results of the Venezuelan oil industry.
The fact that Venezuela has already left behind Guyana in terms of exports is particularly bitter for its neighbor. Guyana’s exports of 621,000 barrels of oil in February surpassed Venezuela’s exports of 604,000 barrels for the first time, local media reports. Meanwhile, the president of Guyana, Irfaan Ali, is accelerating at a major oil and gas fair in Georgetown: “Now is the time to produce our gas as well. There is an opportunity until the end of the decade to to market too ,” announced Ali.
(ct/s)
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