Last week when acclaimed academic Dr Damien King expressed the hope that Jamaica never strikes commercially viable oil, many people were dumbfounded.
King, a former lecturer in economics at the University of the West Indies and executive director of the Caribbean Policy Research Institute (CAPRI), said such a discovery could land the island in a dreaded season of ‘resource curse’. This tends to happen when the discovery of natural resources weakens, rather than strengthens, a country’s institutions and governance.
He was vociferous in his argument that the potential wealth and power that flows from an oil discovery is a fertile condition for political and financial corruption.
King is not standing alone in his position. It is a proven fact that the governance structures in Jamaica are weak and failing. Very few Jamaicans trust the government, and the people know that access to oil wealth could bring out the worst yet.
The early findings from a recent geochemical survey suggest that the nation could be sitting on approximately 7 billion barrels of oil, with a potential value reaching up to US$70 billion. This massive oil wealth would be a transformative “game-changer” for Jamaica, potentially doubling the country’s GDP and fundamentally altering its fiscal landscape.
But Jamaica has a band of robbers operating at some of the highest levels. Corrupt politicians will fight to get their hands on the spoils, greedy private sector entities and their friends will want control of outputs, and middle men from hell will seek to hijack the process.
Already the government is anticipating that Jamaica could begin drilling for oil in two years. Energy Minister Daryl Vaz has indicated that representatives of United Oil and Gas, the company that is licensed to do the exploration, have already started engaging potential investors and are seeing growing interest from major drilling companies.
Vaz gave no details of how these foreign entities are to be engaged or how the production and management of the precious commodity are to be handled. It is expected that the government will hold “sovereign rights” or ownership of the commodity within the island’s borders and territorial waters, but that ownership is likely to shift to private companies when the oil is extracted.
Jamaica must take lessons from Guyana, one of the most potent oil stories on the planet right now. The south American nation officially discovered commercial quantities of oil in 2015, when ExxonMobil announced a massive, high-quality find at the Liza-1 well in the Stabroek Block.
While the natural resource belongs to Guyana, the 2016 contract dictates that the consortium of United States companies behind the exploration and drilling can use 75% of oil production to recover costs. The remaining 25% profit oil is split 50/50 between Guyana and the same consortium, plus a 2% royalty, resulting in only a 14.5% total take on gross revenue for Guyana initially.
While Guyana produces light crude from the Stabroek Block, Exxon and partners export almost all the crude from the country and import every gallon of gasoline, diesel, and cooking gas for local use. Without a local refinery, Guyana is at the mercy of international shipping companies and global price volatility.
Guyana produces close to a million barrels of oil a day, with more projects ramping up fast. Yet last week, the people of oil-rich Guyana were lining up for hours at gas stations; some pumps ran dry, and stations were rationing fuel or straight-up closed.
Trinidad and Tobago and Venezuela, other oil-rich countries in the region, also lack signs of true prosperity despite the presence of commercially viable quantities of the commodity.
Oil discovery in Trinidad and Tobago, Venezuela, Guyana or Jamaica is not by accident. God is not shocked by the presence of natural resources embedded in the land. He planted them there in the first place. .
Be sure of this: the oil, in and of itself, is no guarantee of prosperity. God determines when such resources are to be identified and whether nations will thrive or be demolished with these discoveries. It is the Spirit of the Living God who commands blessings and delivers success, profitability and wealth to the people and the works of their hands. And He does this with or without natural resources because it is still righteousness that exalts nations.
There are many nations that are blessed with commercially viable quantities of gold, diamond, oil and other natural resources in Africa that are numbered among the poorest countries in the world. And there are many others with no evidence of such resources that thrive.
Even with the prospects of oil along the eastern coastline, Jamaica, a country with a prayer as its national anthem and its national pledge – a declaration of obedience to God,God – has found itself among the accursed nations. Oil cannot heal our land.
This nation has abandoned its rich and blessed heritage that was established by our foreparents, whose blood, sweat and tears watered the deadly fights for freedom. They built their families on the Word of God and overcame the most inhumane and brutish circumstances, leaning on His everlasting arms.
At this juncture, even if oil is discovered in large commercial quantities, unless Jamaica repents, the ‘resource curse’ that Dr King dreads is sure to be our portion.
If Jamaica does not seek God’s face and turn away from wickedness by 2027, the discovery of oil will not bring economic relief but only untold grief and intensified judgement.