EconomyGuyana

Commonwealth says $43.5 billion of Guyana's assets face flood risk on coast

The Commonwealth Secretariat estimates $43.5 billion of Guyana's assets are exposed to flooding as oil-driven growth gathers on the coast. It urges the country to set aside revenue for coastal protection.

Illustration: A cutaway of an offshore platform standing in blue water, with pipes running down to the seabed and a supply boat alongside.
Illustration

The Commonwealth Secretariat says Guyana's oil-driven boom is placing billions of dollars in assets in a coastal zone that is increasingly vulnerable. It estimates that $43.5 billion of the country's assets are exposed to episodic flooding.

The reason is where the growth is happening. Economic activity fueled by oil is concentrating assets along the coast, which raises the amount of property and infrastructure that floods could damage.

The Commonwealth is calling on Guyana to reserve part of the money the state takes in so it can fund lasting protection for its coast. In practice, that would mean reliable spending over many years to guard against flooding and other dangers along the shoreline.

It also says Guyana has yet to adapt its governance and its financing arrangements enough to deal with these threats.

A separate concern involves costs in the oil sector. ExxonMobil Guyana Limited has started an extensive exploration campaign in the Stabroek Block, offshore Guyana. Guyana could ultimately have to bear some of those costs through cost recovery, a system in which oil revenue is used to repay a producer's spending.

Those costs remain largely undisclosed. Opposition lawmaker Solomon warns that Parliament has not been told about the exploration budgets or the well results. Higher costs could reduce the oil profits available to the country.

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