23 January 2023 – Georgetown, Guyana – Deutsche Welle (DW), the International Broadcaster of Germany, has just published an in-depth article in its Spanish section on the influence of oil wealth on Guyana, and the potential of this influence to extend to the region. TOTALTEC CEO Lars Mangal was interviewed, as were academics and economists from Venezuela and Argentina. The article included a 6 minute video interviewing citizens affected by the rapid growth. Through its interviewees, the article provides a worthwhile commentary on the status and future challenges for the people and economy of Guyana.
Regarding the article, Mangal commented, “DW is a quality, widely read information source, and this is yet another example of a major news site discovering the new Guyana, bringing exposure to their audience.” Mangal continued, “Visibility in new, credible news sources has the potential to bring investors and innovators, ones able to contribute to key areas where capacity must be built, beyond oil, for example in infrastructure and sustainable development.”
A translation of the DW article from its original Spanish follows.
How Guyana's significant economic growth can impact Latin America
Rapid economic growth may not only impact Guyanese, but also neighboring countries. Given the need for labor, many Latin Americans could emigrate to Guyana. Guyana, a small country of approximately 800,000 inhabitants located in the northeast of South America, is one of the poorest in the region, but that is rapidly changing. Large foreign consortiums, such as ExxonMobil and partner Hess Corporation, are producing nearly 400,000 barrels of crude a day from the reserves discovered offshore in 2015. The English-speaking country has to date generated more than a billion dollars in profits.
According to the International Monetary Fund (IMF), with an increase of almost 60 percent in its gross domestic product (GDP), Guyana was the country that grew the most in 2022 and should continue to do so this year: "GDP per capita already exceeds USD 9,000. Guyana's commercially recoverable oil reserves are expected to exceed 11 billion barrels," the IMF reported.
According to ExxonMobil forecasts, Guyana will become the oil producer with the highest per capita production in the world some time between 2027 and 2030.
"Transformative" Economic Development
In his New Year's message, Guyana President Dr. Irfaan Ali provided assurance that his government will ensure that "the fruits of this growth are shared more equitably among our people. Our primary objective is shared prosperity, characterized by the reduction of inequalities."
In conversation with DW, Lars Mangal, CEO of TOTALTEC Oilfield Services Limited in Guyana, said, “This transformational economic development is happening on a scale that has not been seen anywhere else in the world." He continued, “Guyana has moved from being one of the poorest countries in the Western Hemisphere to being the fastest growing economy in the world.”
However, this growth spurt should be taken with a grain of salt.
Luis Oliveros, a Venezuelan economist specializing in oil, told DW that "Guyana has a huge challenge not to make the same mistakes that Venezuela has made in the previous 100 years, and especially in the last 24."
Oliveros continued, "It must seek to strengthen its institutions, create savings mechanisms —such as sovereign wealth funds— and investment. It must work to ensure that oil has a positive and sustained impact on its economy."
Mangal commented, “There are a number of new business opportunities for Guyanese companies for products and services used directly in the energy sector. The Guyana Shore Base Inc., established in 2017, is the leading example, providing full support to ExxonMobil onshore and offshore operations, employing more than 500 Guyanese.”
Mangal continued, “ Many local companies will require international partners to accelerate capacity building. This is an area TOTALTEC has focused on since its inception in 2016.”
A place to emigrate?
The growing foreign interest in Guyana's natural resources also requires more workers for other areas:
"There are already a large number of expatriates working in sectors other than oil. Guyana needs workers for the construction sectors, engineering projects, and development of the medical sector," Mangal explained. "As part of this transformation, Guyana will welcome international workers.”
Migration to Guyana will depend "both on the pace of activity and on government policies, but it will surely receive migratory pressures," said Roberto Kozulj, an Argentine economist and researcher at the National University of Río Negro (UNRN), in conversation with DW.
Meanwhile, Oliveros insisted that the country must work to "improve the quality of life of the population in order to effectively attract the human capital it needs. There is much to do: improve airports, highways, services and hotels, among others. The government is aware of that and is working to achieve it".
Guyana's impact on the region
Guyana has the potential to "become a strong and serious actor in the region, with the ability to support not only the Caribbean countries, but also connecting with countries like Mexico, Central American ones, and perhaps, in the future, even with Venezuela," said Mangal.
Oliveros, who is also a professor of oil economics at the Central University of Venezuela, agreed: "In a short time, (Guyana) is going to produce more oil than Venezuela and its potential is greater than that of Colombia."
"Guyana is an attractive country for investment, so the countries of the region must take it into account.” This expert concluded, "It will not only compete with these other countries in the region in the oil markets, but also for investment and human resources".
/////////////// End ////////
Deutsche Welle (DW) is Germany’s international broadcaster and one of the most successful and relevant international media outlets, drawing approximately 300 million visitors each week. DW provides journalistic content in 32 languages, giving people worldwide the opportunity to form their own opinions.
The original article in Spanish appears on the DW website here:
Visit the main DW website English page here.
TOTALTEC is focused on the success of the energy industry in Guyana for the benefit of the country, its people, and partner companies. It does this through three areas: people, partnerships, and facilities. Qualified and motivated Guyanese develop through the TOTALTEC Academy, where more than 1,600 have been trained. Partnerships prioritize capacity building in starting points to grow from, creating new Guyanese led companies, for example Jaguar Oilfield Services. Facilities include Guyana Shore Base Inc (GYSBI, also a partnership) providing a complete range of services to support onshore/offshore operations. The TOTALTEC 95% Guyanese workforce includes 6 nationalities with more than 160 years of international oilfield experience. https://www.totaltec-os.com
Minister of Natural Resources Vickram Bharrat provides Deutsche Welle with the economic context from hydrocarbon discovery in the prolific Guyana-Suriname basin.