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Guyana Oil

Exxon Mobile’s recent Guyana oil discovery has given the historically poor nation reason to cheer. With oil the most important commodity in the global market, the South American country expects to make a large profit from the discovery.

Exxon Mobil found the oil on their sprawling 6.6 million acre oilfield off the coast of Stabroek, Guyana.

In the Stabroek block, the company’s Liza-1 well was drilled to more than 17,000 feet. There, the company found more than 295 feet of high-quality oil-bearing sandstone reservoirs.

The oil company is encouraged by the discovery and plans to determine the potential of the other sites.

With Liza-1 being the company’s first site of many, there is a good chance of further discoveries. Also, the findings from the well will be sent for analysis to determine its full commercial potential.

Even if no further discoveries are made, Guyana’s former Minister of Natural Resources and the Environment believes any discovery of oil will greatly boost the nation’s economy.

With Guyana having the 157th largest economy in the world, the recent discovery of the highly valued commodity promises to have transformational effects on the nation. Large revenues and foreign investments will pour into the country from its oil sales.

To ensure that the money will be used wisely, the President of Guyana, David Granger, promises to create a sovereign wealth fund from the Guyana oil revenue.

A sovereign wealth fund (SWF) is a pool of a nation’s money that is set aside for investments that will benefit the country’s economy and citizens. In this case, the revenue from Guyana oil sales will be put into a fund that will be reinvested in the country.

To assist in the creation of the SWF, Guyana is turning to their neighbor to the north, Canada. Researchers at the University of Calgary are putting together plans for the creation of the SWF.

Speaking on this, Guyana’s Minister of Governance, Raphael Trotman, said, “So later in the month of November, a team is coming from the University of Calgary with the specific responsibility of putting together the mechanism for what we refer to as the Sovereign Wealth Fund.”

The minister went on to reveal that the SWF will be split into three separate sub-funds.

One will look to secure funds the nation’s wealth for the future generations. The second will be a rainy-day fund for the nation’s budget in fiscally lean years. The third will be for developmental projects or initiatives.

Trotman expanded on this, saying, “So there are three funds that comprise the Sovereign Wealth Fund, but each has a different rate at which it is supplied and different reasons or mechanisms from which it can draw down.”

The three sub-funds ensure that the Guyana oil wealth will be used to benefit the nation as a whole. It includes investments into development and plans to save for the future.

The SWF is such a popular idea among the people that during the previous election both the current President and the opposition party had plans to create one.

Upon inauguration, President Granger promised that any funds from natural resources would benefit the people through an SWF.

He believes an SWF will make sure that “children will not have to live in poverty; that no matter what happens to the resources of the country, there will always be wealth to look after their education.”

The large oil revenues pouring into the SWF ensures that Guyana will have a strong investment in the nation and its citizens.

Andrew Wildes

Sources: Guyana Times 1, Guyana Times 2, Investopedia, Quandl
Photo: Guyanese Online

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Some big-name companies and corporations gave large donations last year to assist in the fight against poverty. According to a U.S. study in The Chronicle of Philanthropy, corporate philanthropy actually increased by 2.7 percent in 2012, contributing significantly to poverty reduction initiatives worldwide. Big businesses decided to give and, most importantly, give more. Of the businesses that made up the majority, the most influential of those in terms of global poverty were Walmart, Chevron Corporation, Goldman Sachs, Exxon Mobil, and JPMorgan Chase & Company.

Walmart is one of the top ten companies that give the most charitable donations. Walmart donated $311,607,280 in cash and $755,868,381 in products to 50,000 different charities in 2012. Since the creation of their “Fighting Hunger Together” campaign in 2010, the company has given away over 1 billion pounds of food to people in need. They have partnered with Feeding America, ConAgra Foods, General Mills, Kellogg Company, Kraft Foods, and Unilever to provide meals to these people. Their Golden Spark campaign also assisted in this effort. Through October 14, 2012, Walmart randomly awarded 40 “Golden Sparks” valued at $50,000 each to consumers who participated in the Fighting Hunger Together Golden Spark promotion. The winners chose a community to receive the funding to start or expand a backpack program that provides vital meals to food-insecure children during weekends when they do not have access to free and reduced-price school meals.

Chevron Corporation gave $262,430,000 to the Global Fund to Fight AIDS, Tuberculosis, and Malaria. The corporation’s largest grant last year was $11 million to the Niger Delta Partnership Initiative Foundation. This donation went towards fighting poverty in Nigeria through increasing local incomes, employment opportunities, and promoting economic health.

Goldman Sachs gave $241,278,912 overall last year. Its biggest contribution to the fight against global poverty has been its creation of the 10,000 Women project. This project provides women around the world with educational opportunities in areas such as business and management in order to attain independence. It also offers them access to positive mentors. Overall, the project focuses on empowering women to obtain networking and career opportunities. Women such as Linlin, who is now involved in early childhood education in Beijing, China, attest to the project’s helpfulness. “10,000 Women taught me the fundamentals of business management,” Linlin said. “It also helped me become braver and more confident.”

Exxon Mobil gave $213,374,183 in cash and $2,433,200 in products. Its grants mostly contributed to science and math education as well as career opportunities for women. It donated almost $3 million to Vital Voices Global Partnership, which supports the Business Women’s Network efforts in Africa, Latin America, and the Middle East. Malaria No More received $1.8 million. This corporate giving was used to expand the organization’s NightWatch program, a malaria communications platform that uses celebrity voices to reach vulnerable populations through text messaging, television, radio, and music, reminding them to put up mosquito nets. The program has gained support from celebrities, leaders, businesses, and even endorsement from the Ministry of Health. It has empowered families to keep themselves safe from the threat of malaria by ensuring education is present in places such as Tanzania and Cameroon.

JP Morgan Chase & Company gave $183,471,434 overall last year. Specifically, it donated $2,180,000 to GAVI Alliance to improve global access to immunizations. A triumphant success story regarding the foundation’s donation can be viewed here: Donation Supports Roll Out of Two Vaccines in Ghana. These pneumococcal and rotavirus vaccines are meant to combat pneumonia and diarrhea – illnesses that account for 20% of Ghana’s child mortality rate.

– Samantha Davis

Sources: Chronicle of Philanthropy, Walmart, Chevron, Niger Delta Partnership Initiative Foundation, Niger Delta Partnership Initiative Foundation, Goldman Sachs, Philanthropy.com, NightWatch Program, GAVI Alliance