The African Export-Import Bank (Afreximbank) has revealed its intention to create a $1 billion financing facility dedicated to oil services in Guyana. This initiative is designed to boost local involvement in the rapidly expanding oil sector, in accordance with the government’s local content regulations. The announcement was made by Afreximbank’s President and Chairman of the Board of Directors, Prof. Benedict Oramah, during the recent Guyana Energy Conference and Supply Chain Expo.
Prof. Oramah underscored the significant impact of Guyana’s estimated 12 billion barrels of crude oil reserves. He stressed the importance of proactive resource management, urging the country to effectively leverage and capitalize on its oil assets.
“Considering the current level of oil production in Guyana and its offshore positioning, I project that the oil service sector could generate between 5 to 8 billion U.S. dollars annually,” Oramah stated. “However, if no action is taken, a substantial portion of this revenue will flow to foreign oil service companies. Retaining 50% of this revenue in Guyana could boost the nation’s GDP by 29% to 47%.” He advocated for strong local content policies that would empower Guyanese entrepreneurs to play a vital role in the oil value chain.
“The commodity market is inherently volatile and cyclical; therefore, depending heavily on crude oil revenues for government funding could make the national economy vulnerable to fluctuations in commodity prices,” Oramah added. He recommended that the government secure long-term contracts with oil service companies to improve market access and ensure price stability.
In a bid to strengthen Afri-Caribbean collaboration, President Oramah noted that skilled oil service firms from Ghana, Egypt, and South Africa are “eager to assist Guyanese… And, of course, Afreximbank is prepared to facilitate this partnership.”
SOURCE: World Oil