Lagos — The African Export-Import Bank (Afreximbank) has announced plans to establish a $1 billion oil service financing facility in Guyana. This initiative aims to enhance local participation in the country’s fast growing oil industry, in alignment with the government’s local content policies. Afreximbank’s President and Chairman of the Board of Directors Prof. Benedict Oramah made the announcement at last week’s Guyana Energy Conference and Supply Chain Expo.
President Oramah highlighted the transformative potential of Guyana’s estimated 12 billion barrels of crude oil reserves. Emphasizing the transformative power in proactive resource management, he advised Guyana to aggressively harness and build capital from its oil resources.
“Given the level of oil production in Guyana and its offshore location, I estimate that the oil service sector would amount to 5 to 8 billion U.S. dollars annually,” Oramah said. “But where will it go? Most of it would be paid to oil service companies abroad, if Guyana does nothing to avoid that. A 50% retention in Guyana would increase Guyana’s GDP by 29% to 47%.” As such, he called for robust local content policies that would enable Guyanese entrepreneurs to become significant players in the oil value chain.
“The commodity market is prone to volatility and cyclicality; hence, the reliance on crude revenues as a primary source of government funding could expose the national economy to volatile commodity markets,” Oramah continued. “As such, he advised the government to secure long-term off-take contracts with oil service companies, which will enhance market access and price stability.
In the spirit of deepening Afri-Caribbean partnership, President Oramah remarked that skilled oil service companies from Ghana, Egypt, and South Africa, are “ready and willing to support Guyanese… And of course, Afreximbank is there to underwrite the marriage.”
