Guyana will have to be cautious with future policies but not concerned about US oil-drilling plans – VP

Vice President Dr Bharrat Jagdeo has dismissed concerns about United States President Donald Trump’s plans to increase oil drilling in the US, stating that Guyana will now have to plan carefully and tailor its policies to these potential changes in the global market.

Earlier this week, President Trump reversed environmental restrictions on energy infrastructure as part of his Administration’s plans to heighten domestic oil and gas production.

The new US president promised to bring prices down, fill strategic reserves up and export American energy across the world.

However, these plans have raised concerns about the impact it could have on the world market with Brent prices already down.

This situation is likely to affect Guyana’s burgeoning oil and gas sector especially the country’s earnings from its offshore production operations.

But Vice President Dr Bharrat is not worried about the US energy policy.

“There is a concern that with increased production in the US, that there could be an oversupply of the market [and] that would have an impact on the prices. You have to take account of all these variables when you plan future expenditures. That is why our dear friends from the other side (the Opposition) who are pretending as though oil money would always be there and that it’s guaranteed. Next year, it’s not guaranteed; it’s not guaranteed…

“And so, that is why you have to be cautious. There is that possibility that prices could come down… As an oil-producing country, it’s not a concern. It is something that the policymakers have to analyze when you think about your policies here in Guyana, your budgetary policies and everything else for that matter. So, we are very much aware of what he has said,” Jagdeo posited.

In fact, one of the frames within which the Guyana Government is analyzing these developments is the balancing out of the ramp-up of oil production in the US with the possible increase in demand for fossil fuel when the North American nation cuts back on its renewable energy.

“The converse of it is that [the US production] will go towards increasing supply, which puts a downward pressure on oil prices. On the other hand, President Trump is exiting the Paris Agreement and also stopping the renewable energy projects in the US. He said windmill projects and all of the others. So, if the supply would have been enhanced by renewable energy coming on stream that are not going to come on stream any longer [then] that would tend to increase the demand for fossil fuel-related sort of investment on demand. So, it could balance out there,” the Vice President explained.