THE PIPER: End of oil age?

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In Finance Minister Winston Jordan’s Budget Speech at the end of January, he offered his Government’s perspective on our oil prospects, in the wake of ExxonMobil’s confirmation of “significant” deposits in their Stabroek Block, and the subsequent interest shown by other oil companies.
 piper1“Despite low oil prices, which are expected to continue through next year, all licensed operators remain committed and new venture interests are considered on a regular basis. These investments will bring fruitful rewards to the Guyanese people through increased revenues, employment and income, which will propel Guyana towards achieving national as well as sustainable development goals,” Jordan stated.
The APNU/AFC coalition evidently expects the low sub US$30/barrel  oil prices to continue for only another year, thus giving hope to Guyanese that oil revenues might start flowing within the 3-5 year window that is normal from deep-sea wells. But how realistic is that projection? Last week, the International Petroleum Week held its annual bash in London, with producers from over 50 countries in attendance.
The mood was positively gloomy as Ian Taylor, chief executive officer of Vitol Group, the world’s largest independent oil trader, predicted oil prices would stay low for up to a decade as Chinese economic growth slows and the U.S. ‘shale’ industry acts as a cap on any rally in a world that is awash with oil.  “I wouldn’t be surprised if this market goes into the teens,” said Jeff Currie, head of commodities research at Goldman Sachs Group.
The Opposition PPP did not challenge the Finance Minister’s optimism for a quick recovery of oil prices into the US$60 range that will make it feasible to pump out our oil. But this discussion needs to take place sooner rather than later because we may be on the cusp of contracting an anticipatory “Dutch Disease”, where economic activity in the economy outside of oil slows down because of the latter being seen as solving all challenges.
Most analysts have been focusing on the Saudi Arabians refusing to lower their oil production in the face of the booming US shale production,  to maintain their market share. They have missed the misgivings top Saudi analysts and oil officials have expressed about the future of oil itself, in a world that is compelled to seek renewable and alternative energy supplies on account of global warming as well as saving foreign currency.
Saudis have never bought into the dogma of “peak oil” – which posited “finite stocks of oil” supply against ever rising demand. The Saudi Oil Minister Ali al Naimi has consistently been warning his peers about a deeper structural development: flagging long-term demand. They see shale oil as an aberration which cannot head off the ultimate denoument  where oil will be left in the ground because it will not be economic to pump it out – at any price.  It is therefore in Saudi Arabia’s interest to extract as much oil as they can while they can have markets in the near term. And all the while developing alternative industries, such as their potash reserves, for the future.
As Sheik Ahmad Zaki Yamani, the Saudi Oil Minister who rocked the world back in 1973 when he led OPEC’s quadrupling of oil price  quipped a while ago, “The stone age didn’t end because they ran out of stones.” And so will the petroleum age.

4 COMMENTS

  1. Who gave Guyana telephone company with $400 million in a bank account…..PNC/APNU. Who gave away all our gold to OMAI and 3 cyanide pits are left for our kids to swim in…. PNC/APNU. Who is not dropping the price of gas in spite of a world market slump on oil…. PNC/APNU!!! Want me to go on?

  2. Johnny come lately you are not just a pnc dunce and dullard but a gullible one at that to not know the difference between 100% and 55%. that makes you a four faced pnc devil aint it ?

  3. Who give foreigners permission to rape the country’s forests with zero benefits to the country? You sound like Janus, the two faced Roman god.

  4. THE PIPER: End of oil age? Piper you hit it smack out the ball park…
    Once American Exxon found oil in Guyana the Americans knew they could grab oil cheaper under a PNC regime rather than doing business with a PPP regime.
    The Americans are very smart people- they look out for America and to hell with the rest of the world – this is something the opposition in all other countries never understood. So when opposition wants power they get America to help destabilize their countries- what they don’t know is that American destabilization in their countries comes with a heavy price- America takes what it wants out of your country- raw materials and all- Does PNC understand this? You bet PNC do because it was America that installed PNC to rule and PNC ruled Guyana for 28 long, hard, suffering, dreadful years. Does America and PNC care about Guyanese? You be the judge on that – PNC ruled for 28 year and at the end of it Guyana was declared a failed state. Bankrupt! Renewable and alternative energy supplies are here to stay, like it or not.
    The oil glut American knew it only too well.
    America installed PNC to rule again so they could put that ring in any PNC top dog nose and take what America wants out of Guyana. Well the Americans cant get PNC oil any cheaper, can they?
    You bet your life on it that Americans knew now that it was a mistake to install PNC to power again.. After installation by US the PNC went on a jump up spree spending money from the treasury like it going out of style banking on oil money to come. PNC looked scared now..Take a serious look at PNC top brass..PNC does not know economics and how to run a country…PNC past will forever haunt them when it comes to business people. They all know PNC brutal past.
    PNC better go on their knees and pray that the people don’t take to the streets demanding PNC drop oil price and drop electricity cost..Those are the only 2 things that have PNC going right now. America and PNC know this.

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