Entry Strategies for Guyana's Oil and Gas Sector

Guyana’s recent discovery of significant crude oil reserves has it poised to become the Caribbean’s newest oil producing country in the near future. The find promises to open up exciting opportunities for Guyana’s growth and development. It also presents opportunities for new and more meaningful forms of participation – of both local and foreign businesses – in Guyana’s economy.

Building Guyana’s infant oil and gas sector will require highly specialised skills, technology, services and expertise. Much of this is not within its immediate capacity, with virtually no experience in oil and gas. These are capacities Guyana will instead have to build over time and it is therefore encouraging, that even early plans for Guyana’s management of its emerging oil and gas sector are seeking to incorporate training and development as a long-term objective.

Despite this current limitation, there is an abundance of opportunities for Guyana’s local business community to play an immediate and significant role in supporting the oil and gas sector, whether it be through providing goods or support services, facilitating the training and development of Guyanese nationals or building the infrastructure needed to support the sector’s expansion.

Capitalising on these opportunities will require quick thinking, careful planning and strategic action. Local businesses looking to participate in Guyana’s oil and gas sector should already be engaging in a close examination of their skills, services and product lines to identify how these can be either modified or applied in service of oil and gas. They should also seek to embrace opportunities for partnerships with the oil and gas companies already in operation in Guyana. These partnerships can be an invaluable entry point into the sector as well, but local businesses will also have to ensure that their standards are in keeping with international best practices if they are to be successful at this strategy.

On another note, both the production and development of Guyana’s proven oil reserves and the increase in exploration for additional reserves that is sure to follow, also presents opportunities for the entry of foreign entities, many of whom have indicated an interest and availability to play a role. This is good news for local and foreign businesses alike, as both would benefit from seeking out partnerships with each other. Pursuing opportunities for joint ventures with local businesses can make it easier for foreign businesses to gain entry into the local market while local business will learn the ropes of the industry much faster if they can benefit from the knowledge, technology and experience of foreign partners.

But before seeking out opportunities for partnerships, foreign businesses would do well to learn the ‘rules of the game’, namely the legislative and regulatory framework within which they would operate should they be successful in gaining entry to Guyana’s entry into oil and gas sector. Researching current market trends and development patterns, either on their own or through the help of a consultant, can also help these business to better understand Guyana’s economic, political and social environment, identify market risks and opportunities and develop further strategies to establish and expand their presence.

With oil production in Guyana expected to start as early as 2020, both foreign and local businesses are facing a steep learning curve and a very short timeline to master it. We should all have a vested interest in ensuring that Guyana is an enabling and supportive environment for all businesses to thrive. Driving a collaborative approach will be critical to their success.