Guyana Casting the Oil Ballot

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Guyana held disputed general elections on Monday March 2, though claims of fraud are ratcheting up tension between political parties and casting doubt over the outcome.  Guyana, the latest oil state, could slip into a deep political crisis – just as oil revenues begin to roll in.

In January, Guyana became an oil exporter as the South American country shipped its first cargo of light Liza crude, from the Liza field at the Stabroek block. Since then, Guyana has exported two more cargoes, for a total of 3 million barrels. At the same time, new vessels are arriving at Guyanese territorial waters to load more cargoes.

Half of the volume exported has headed to Exxon’s Baytown refinery on the US Gulf Coast. This is no surprise, given the oil major is the operator of the Liza oil field. Meanwhile, the remaining 1.4 million barrels have been discharged at Panama’s Chiriqui Grande, though that crude may yet be transshipped to the US West Coast.

Guyana is an importer of petroleum products, bringing in some 4,000 barrels per day of gasoline and middle distillates in 2019. Trinidad and Tobago is by far the leading supplier.

In terms of the election, incumbent president David Granger declared victory on Thursday. Yet the opposition, for its part, has claimed fraud following the results of region four, one of the key areas in the country.

It is unlikely that the winner of the elections will disrupt Guyana’s energy path, though the opposition is likely to renegotiate the terms of some of its contracts with oil companies to garner the South American country better benefits. Nonetheless, it remains to be seen how Guyana escapes from the current political crisis – all the while as petrodollars flow in.