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A tiny rainforest country is growing into a petrostate. A US oil company could reap the biggest rewards
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Guyana’s destiny changed in 2015. US fossil fuel giant Exxon discovered nearly 11 billion barrels of oil in the deep water off the coast of this tiny, rainforested country.It was one of the most spectacular oil discoveries of recent decades. By 2019, Exxon and its partners, US oil company Hess and China-headquartered CNOOC, had started producing the fossil fuel.? They now pump around 650,000 barrels of oil a day, with plans to more than double this to 1.3 million by 2027.
Guyana now has the world’s highest expected oil production growth through 2035.
This country — sandwiched between Brazil, Venezuela and Suriname — has been hailed as a climate champion for the lush, well-preserved forests that carpet nearly 90% of its land. It is on the path to becoming a petrostate at the same time as the impacts of the fossil fuel-driven climate crisis escalate.
While the government says environmental protection and an oil industry can go hand-in-hand, and low-income countries must be allowed to exploit their own resources, critics say it’s a dangerous path in a warming world, and the benefits may ultimately skew toward Exxon — not Guyana.
A tiny rainforest country is growing into a petrostate. A US oil company could reap the biggest rewards
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Guyana’s destiny changed in 2015. US fossil fuel giant Exxon discovered nearly 11 billion barrels of oil in the deep water off the coast of this tiny, rainforested country.It was one of the most spectacular oil discoveries of recent decades. By 2019, Exxon and its partners, US oil company Hess and China-headquartered CNOOC, had started producing the fossil fuel.? They now pump around 650,000 barrels of oil a day, with plans to more than double this to 1.3 million by 2027.
Guyana now has the world’s highest expected oil production growth through 2035.
This country — sandwiched between Brazil, Venezuela and Suriname — has been hailed as a climate champion for the lush, well-preserved forests that carpet nearly 90% of its land. It is on the path to becoming a petrostate at the same time as the impacts of the fossil fuel-driven climate crisis escalate.
While the government says environmental protection and an oil industry can go hand-in-hand, and low-income countries must be allowed to exploit their own resources, critics say it’s a dangerous path in a warming world, and the benefits may ultimately skew toward Exxon — not Guyana.
Since Exxon’s transformative discovery, Guyana’s government has tightly embraced oil as a route to prosperity. In December 2019, then-President David Granger said in a speech, “petroleum resources will be utilized to provide the good life for all … Every Guyanese will benefit.”It’s a narrative that has continued under current President Mohamed Irfaan Ali, who says new oil wealth will allow Guyana to develop better infrastructure, healthcare and climate adaptation.
“You have a government that is reckless about what is going to happen to Guyana,” said Melinda Janki, an international lawyer in Guyana who is handling several lawsuits against Exxon. It’s pursuing “a supposed course of development that is actually backward and destructive,” she told CNN.
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And while plenty of Guyanese people welcome the new oil industry, some say Guyana’s startling economic statistics do not reflect a real-world prosperity for ordinary people, many of whom are struggling with the higher prices accompanying the oil boom. Inflation rose 6.6% in 2023, with prices of some foods shooting up much more rapidly.“Since the oil extraction began in Guyana, we have noticed that our cost of living has gone sky high,” said Wintress White, of Red Thread, a non-profit that focuses on improving living conditions for Guyanese women. “The money is not trickling down to the masses,” she told CNN.
CNN contacted President Ali, the Ministry of Natural Resources and the Ministry of Finance for comment but received no response.
Guyana, a former Dutch then British colony which gained independence in 1966, is one of only a handful of countries that is a “carbon sink,” meaning it stores more planet-heating pollution than it produces. This is due to its vast rainforest; trees remove carbon dioxide from the atmosphere as they grow.The country has protected its biodiversity where others have destroyed theirs, President Ali said in a BBC interview last year. In 2009, the country signed an agreement with Norway, which promised Guyana more than $250 million to preserve its 18.5 million hectares, or nearly 46 million acres, of forests.
Ali insists the country can balance climate leadership and fossil fuel exploitation. The new oil wealth will allow Guayana to develop, including building climate adaptations such as sea walls, he has said. He has also pointed to the continued failures of wealthy countries, already grown rich on their own fossil fuels, to help poorer countries with climate finance.
But there are concerns Guyana could fall victim to the “resource curse,” in which vast, new wealth ?can actually make life worse for those who live there.
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