Guyana's oil boom faces ruin if sanctions imposed – Ramnarine
multi billion dollar oil industry and economy is at risk of being destroyed should the severity of United States sanctions escalate says former Energy Minister Kevin Ramnarine.
United States Secretary of State Mike Pompeo on Wednesday announced that the United States will be revoking visas from individuals “responsible for or complicit in undermining democracy in Guyana.”
He added that “immediate family members and such persons may also be subject to restrictions.”
Pompeo called on incumbent President
David Granger to respect the results of the elections.
Ramnarine told the Express that the announcement of sanctions on individuals signals a very serious development for Guyana. He said it comes as no surprise as the Secretary of State and other senior State department officials have been publicly expressing their concerns about the situation in Guyana in recent months.
"As we have seen with Venezuela, the United States' application of sanctions usually follows a gradual and incremental pattern. This might therefore be the first wave of sanctions. Should the US see no improvement in the situation in Guyana, the sanctions might be ramped up to include economic sanctions such as sanctions on shipping, on senior Guyanese government officials doing business with American companies and on the payments of goods and services for the oil industry," he said.
Ramnarine said the oil companies usually assess political risk in their overall assessment of the attractiveness of countries as investment destinations. In this regard, he said it is clear that the political risk associated with Guyana is now high and that could serve as a deterrent to future investments in the oil industry.
"I am certain that what is happening in Guyana is of concern to ExxonMobil and Hess given that they are American companies. This makes the situation in Guyana even more complicated.
Prior to these sanctions, ExxonMobil said the political impasse was responsible for the slippage in the start up of the Payara project which is the third development project by ExxonMobil in Guyana following on Liza 1 and Liza 2," he said.
"Should the severity of sanctions escalate, it will damage not just the new oil industry but the Guyanese economy. The Guyanese economy is dependent for example on remittances from the Guyanese diaspora living and working in the United States," he added.
Ramnarine said there is also significant Trinidad and Tobago investment in Guyana with the presence or Massy, Ansa McAl, Republic Bank and other local companies and this situation is going to be of serious concern to these companies.