Article from: OGEL 2 (2020), in Editorial
In 2015, ExxonMobil announced a major discovery of offshore oil in Guyana, with more substantial discoveries made in the following years. With over 6 billion barrels in estimated reserves, predictions of GDP rise range from 300% to 1000% by 2025. For a small nation like Guyana, a substantial oil find of this nature presents a unique opportunity to catalyse its economic development. The well-managed development of an oil sector can transform an economy and the status of a nation. However, it can also lead to a 'resource curse' scenario, whereby a country becomes too dependent on a single industry and fails to regulate resource extraction in a way that manages social and environmental impacts of extractive activities in an effective way. There is a new world of promise and opportunity, but equally of risk. The newly found resources present challenges for Guyanese law- and policymakers, not just in how to best manage the future oil revenues, but also in how to attract foreign investors while maintaining robust enough legislative framework to prevent devastating environmental and social effects of an oil boom.
This special issue was conceived at an international conference organised by the editors in May 2019 in London, titled 'Gateway to a Golden Future: Energy Development in Guyana'. The conference was founded on the idea that in a world driven by metrics, measurements and competition, academics, policy advisors and members of the legal profession could come together in the spirit of cooperation. Coventry Law School and the Aberdeen University Centre for Energy Law met with the key objective of facilitating a dialogue on Guyana and its substantial oil discovery. Many States in similar circumstances have fallen foul of the economic pitfalls that come with such a substantial find, but how could these be mitigated? How could Guyana maintain institutional stability so many others have struggled? Furthermore, in a time where the impact of the fossil fuel industry on the environment and climate is becoming more apparent, how can the nation balance its obligations regarding the global and local environment but maintain a commitment to use their wealth development and growth? These were the most pertinent questions the conference looked to address. In order to address the main areas for concern, the conference focused upon three areas; economic and institutional development, environmental protection and issues of local content. Therefore, submissions in this special issue address some of the more pressing questions arising from the upcoming oil boom in Guyana.
This special issue starts with a status report from Erik N. Smith, on 'Economic and Political Conditions in Guyana, a World Class Hydrocarbon Discovery'. The report highlights the current status of development, regulatory system, and the financial prospects.
Following that, a research paper by Andrew Bauer and David Mihalyi focuses on the 'Challenges and Opportunities in Managing Guyana's Oil Wealth'. The authors examine Guyana's economy and oil sector potential in their analysis of the future oil revenue management in the country. They consider the public finance implications of the Liza oil field development and the consequences of careful management with independent projections indicating that there is potential to double Guyana's national budget.
The next two papers, in turn, address the social and climate change implications of Guyana's oil development. Alicia Elias-Roberts reviews the legal and regulatory regime of local content provisions in Guyana. Taking a comparative approach to other developing economies, the paper moves forward making recommendations at how engagement with the wider stakeholder community can lead to more benefits for the local economy.
In the fourth paper, Katrien Steenmans focuses on climate finance law in Guyana. This article presents a scoping review, facilitated by Bowman's Legal Analytical Framework of Climate Finance Options, of climate finance law in Guyana and examines the possible tensions that exist with laws and policies for the purpose of financing the exploration and production of oil discoveries.
Finally, in consideration of the wider stakeholder community, the fifth paper by Daria Shapovalova highlights the issues surrounding indigenous communities in Guyana. We frequently see where resource rights are concerned, indigenous groups often see little benefit. The paper examines international and domestic provisions and considers what protections are currently available drawing from previous experiences for Guyana's indigenous peoples in the context of mining and logging.
The editors would like to extend our gratitude to authors and peer reviewers for their hard work on the submissions over the past few months. We also extend our thanks to those that attended the conference and especially his excellency, the High Commissioner for Guyana, Frederick Hamley Case.
Finally, we are grateful to the OGEL editorial team for their support and availability in the preparation of this special issue.