Category: The Road to First Oil

"Who has oil has Empire." This statement is attributed to Henry Bérenger, Advisor of French Prime Minister Georges Clemenceau quoted in the editorial in the Daily Argosy of Tuesday 16 July, 1929 on the occasion of a meeting to be held that day at the Town Hall to “discuss the steps, if any, to be taken in the matter of the development of the potential Oil Industry in British Guiana in the placing of an embargo by the British Government on the nature of Capital which should be employed in its exploitation.”

The second in this series of columns on Oil and gas turns its attention to the legislative and regulatory framework for the exploration and production of oil and gas in Guyana. While this column starts with a focus on the legislation put in place in the 1920’s and 30’s, it would not be correct to assume that no legislation existed before that time. Again turning to the Daily Argosy, this time of November 19, 1929, we note references to the imposition of an “Oil Embargo” spurred by the suspicion of the presence of oil deposits in the colony. According to the editorial, the regulations under which exploration licences were issued were modified from time to time “to safeguard the colony and the Empire’s needs.” Those regulations required that “no licences were to be issued or transferred to other than British subjects or to companies in which there was not fifty-one per cent bona fide British control and ownership.”

The effect of a policy of securing the interest of the “colony and the Empire” was to keep out the Americans. It is to be recalled that it was in Pennsylvania, USA in 1859 that the first well for petroleum was mined, allowing the Americans a position of dominance in oil production in succeeding decades. It is therefore somewhat ironic that in post-colonial Guyana, it is an American company ExxonMobil that is at the forefront of oil development, while a British company, Tullow is playing catchup, and the country’s needs and interests still very much dependent on international interests and capital. Continue reading “Oil and gas – The New Economic Horizon (Part 2)”

As Guyana moves to First Oil – that long dreamt event with the possibility of transforming our country – it is hoped that this column will contribute to a better understanding of the vast opportunities and the unobtrusive pitfalls that await us. As historian Nigel Westmaas reminds us, more than 86 years ago, the headline in the British Guiana’s Daily Chronicle exhorted us: “Every Man, Woman and Child in British Guiana Must Become Oil-Minded!”.

Yet, the announcement by oil giant ExxonMobil on May 20, 2015 that it had struck oil in deep waters in Guyana’s territory took Guyanese by total surprise. We have simply had too many cases of hopes raised, only to be dashed, of traces of oil found in various places in Guyana. The unsuccessful search under the first petroleum licence issued in our colony in 1938 did not deter further attempts, particularly in the fifties, to find the black gold. In fact, Standard Oil, the progenitor of ExxonMobil was issued with a licence in 1958 to carry out offshore and coastal exploration.

While this column, courtesy of Stabroek News, is not about looking back, the paucity of legislation to regulate the exploration or production of oil in Guyana stands out in the country’s quest for oil. In fact, the first piece of petroleum legislation passed in 1930 was about the importation and regulation of the distribution of refined petroleum products. More than fifty years later, Deputy Prime Minister, Planning and Development, Haslyn Parris presented to the National Assembly the Petroleum (Exploration and Production) Bill 1986.
Continue reading “Oil and gas – The New Economic Horizon (Part 1)”