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Higher oil prices not necessarily good for Guyana- US Professor

Professor at the University of California San Diego School of Global Policy, David Victor

Lower oil prices may be to the advantage of Guyana which expects to pump first oil by 2020 because  high prices for the ‘black gold’ may trigger corruption by politicians, a University of California, San Diego Professor said Wednesday.

“The higher the oil prices and the more the revenues that flow into the country, the greater the risk that politics in the whole country becomes reorganized around grabbing that money for corrupt purposes rather than using it for development,”  Professor at the UCSD’s School of Global Policy, David Victor told Demerara Waves Online News.

He said there are studies that have shown that this happens in countries during high oil prices. The price of oil is currently just over US$50 per barrel, down from more than US$100 several years ago. Some experts predict that the price may be around US$80 in 2020.

He recommended moving the money “offshore”  into a Sovereign Wealth Fund that would spend the money on infrastructure over a long time rather than putting the money into the National Budget.

Delegates at the 16th La Jolla Energy Conference held by the Institute of the Americas at the University of California, San Diego.

Since ExxonMobil’s discovery of close to 2 billion barrels of oil offshore Guyana, the country has been laying the groundwork for the establishment of a Sovereign Wealth Fund, a petroleum commission and a national oil company.

Earlier during a session at the 26th La Jolla Energy Conference, Professor Victor said Guyana’s energy revenue management would be “helped by persistently low oil prices” backed up by discipline.

The United States (US) has been urging Guyana to spend some of its expected oil revenues on the improvement of health, education and infrastructure among other areas.

Several Guyanese media practitioners are in California attending the La Jolla Energy Conference run by the UCSD’s Institute of Americas.

  • rs dasai

    My thoughts exactly. Now let David use his ‘sling shot’ to get Goliath (?) to reduce oil to $1 per barrell which if good for Guyana, is better for the Oilers. NO?

    • Col123

      Only those folks are not corrupt!.. so they keep upping the price at the pumps!

    • shovid

      RROOLLIINN

  • Col123

    Typical white folks mindset about we black folks!… very suggestive that we can’t handle money… or use our brain to make money!…, well, in fairness, he should have noted who like nuff nuff money, like those who hook up with our athletes…

    • Charles Selman

      When last I contributed to this blog on the issue of oil corrupting politicians, DW did not carry it. So I am trying again.
      We will get what Exxon wants us to get. We will talk tough but a few millions here and a few millions there will quickly shut us up. The African continent is prime example of how oil imposes a burden on the masses in preference for the few. Then coup and counter-coup.
      Between now and 2020 the oil dynamics will change. If research on research on other sources of energy proves successful, oil will remain in the $50: per barrel range, which negates a refinery. So, our product will be crude which will qualify for a lower price.
      In the above scenario, we will be marginally better.
      Do we have the political/economic fortitude and willingness to see Guyana through it all? I doubt it.
      Our leaders do not have the people of Guyana first. They have their individual interests first, second and last.
      Whichever way, oil will put us in deeper sh..! Look at Venezuela.
      Selman

      • Col123

        Have some faith bro… with the shutdown of sugar and challenges with rice, it is easy to see Guyana isolated economically. This economic isolation will move us towards a village economy and will further drive migration. We will lose more of our professionals elsewhere. Granger gave clarity to his vision when he preached about and pushed village economic concepts. Guyana will remain a poor devastated and exploited country for the majority.

        • rs dasai

          Col
          That is why we have to ’till ‘ the soil to survive.

          • Col123

            Yea… it is that “give us this day our daily bread” mode…I read some where 40 years ago,about the comfort that prayer provided to slaves.

    • Gtloyal

      Congrats, tin soljuh. Yuh learning slow but learning anyway.

  • shovid

    WHAT UTTER BULLSHYTE!! HAVE YOU SMELT WHAT YOU SELLING VICTOR!!??

  • powerplayer

    I hope this Guy only got a visa for the conference Somebody told this guy Guyanese love professors and experts.

    Now whoever brought this pleb ought to take a trip to the falls with him. What a shame. What a pleasant group of listeners.

    Please have his blood and urine tested.

  • Storme

    Chase those crazy bald heads. Seems to be a supremacist.

  • sep timo

    In the full scope of this issue there are many many things to consider. Corruption is only one. Of course all of this is under the backdrop of a developing country that needs jobs and funds to improve the lives of the people and also for economic development. Guyana is in a great position because they have a viable source of money dangling right in front of them, and its not a dream. The challenge is how to use the money in a way that’s most beneficial considering all or most of the potential risks. That’s not easy. It requires discipline, and focus and honesty. The article above is highlighting one of the issues to consider, but is narrowly focused on only that issue and as such could never gain full attention from the largest audience, the people of Guyana. To be fair, Price volatility in the oil market going forward is a significant risk that should not be ignored. Especially with the strong interest in investment in a refinery. The price of oil will play a big part in the success of such a venture, and the current volatility and other events in the market (seen and unseen) will make any predictions on price subject to uncertainty. With regard to how all this info is relayed to the stakeholders, My sense is that people of Guyana are more interested in solutions, and how to move forward with this opportunity, given the large potential. That being said, its something for the persons giving advice to consider all the stakeholders in this scenario, and how best scope and deliver the message without short changing the many risks that must also be considered.

    • Col123

      The issues and challenges are well known…. and you are correct about the need for campaign to educate Guyanese and stakeholders on the approaches with this industry. This requires the inclusion of all citizens. Having worked alongside colonizers in reforming and rebuilding war torn countries, I find their interference rather disgusting….and their intent suspicious…. and meddling. Most are stooges of financial powers!… eg Gen. Flynn

      • Gtloyal

        The first challenge to Guyanese is to accept that they must educate themselves about issues that affect their livelihood and have constructive discussions about them before making decisions, instead of doing everything based on ethnic preferences and the depraved discourses of gangsters and con artists masquerading as politicians.

        • Col123

          Preaching to the choir GT… people ead haad…they like to feel pain….all politicians are pimps… but not all pimps are politicians!

          • Gtloyal

            Where do you stand? Are you a politician? Guess you’ll say no. There is one on record pimping for his uncle!

          • Col123

            Neither a pimp or a politician…I would not vote for any grabbing at women parts either… like them so called Christian conservatives did…

          • Gtloyal

            So, unlike what ” them so called Christian conservatives did…” you voted for grabbing at the other sex’s parts, didn’t you? Tin soljuh you’re one of a kind!

          • Col123

            I have enough of my own to hold on to… no need to grab others.. I am Mandingo bro… we have a history of serving massa women!

          • Gtloyal

            So then you didn’t vote for anyone. Good for you.
            Well, we mere mortals used to wait for Mandingo to go out to do his service to sneak in.

          • Col123

            Hey you boy Carson the brain surgeon said we were immigrants and not slaves.. he is a chit head just like a lot a them black folks who salivate on them naked pictures of melania..,