debut: 2/16/17
38,897 runs
A tiny rainforest country is growing into a petrostate.
A US oil company could reap the biggest rewards
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.
Critics say this power imbalance is clear in the 2016 contract Guyana signed with Exxon. Under the agreement, Exxon keeps 75% of everything it makes from its oil operations in Guyana, with the remaining 25% shared equally between the company and the government, which also takes a 2% royalty.“It was a bad deal,” Ali said in the BBC interview, but he has rejected the idea of unilaterally changing the agreement, which was signed by the previous government. He says the next contract with Exxon will be on different terms.An Exxon spokesperson said the contract is “globally competitive for countries at a similar stage of exploration” and said Guyana is averaging $1 billion a year in “oil profits.”
ExxonMobil currently has three projects in the Stabroek block — around 130km (80 miles) off the coast of Guyana — producing around 650,000 barrels of oil per day. Another three are planned for 2027, which is expected to increase production capacity to a total of more than 1.3 million barrels per day.Oil’s economic impact has already been enormous. The country of around 820,000 people is now the world’s fastest expanding economy. Its GDP grew more than 33% in 2023 and more than 40% in 2024.Exxon said it’s had a positive impact on the country, including employing more than 6,200 people, investing more than $2 billion with local Guyanese businesses since 2015 and spending more than $43 million on community projects.But Red Thread’s Wintress White says people are struggling with sky-high rents and food prices that have doubled or tripled in some cases.
“The reality here is that the oil is not a blessing, it’s a curse and it’s only polluting our environment,” she said.
A US oil company could reap the biggest rewards
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.
Critics say this power imbalance is clear in the 2016 contract Guyana signed with Exxon. Under the agreement, Exxon keeps 75% of everything it makes from its oil operations in Guyana, with the remaining 25% shared equally between the company and the government, which also takes a 2% royalty.“It was a bad deal,” Ali said in the BBC interview, but he has rejected the idea of unilaterally changing the agreement, which was signed by the previous government. He says the next contract with Exxon will be on different terms.An Exxon spokesperson said the contract is “globally competitive for countries at a similar stage of exploration” and said Guyana is averaging $1 billion a year in “oil profits.”
ExxonMobil currently has three projects in the Stabroek block — around 130km (80 miles) off the coast of Guyana — producing around 650,000 barrels of oil per day. Another three are planned for 2027, which is expected to increase production capacity to a total of more than 1.3 million barrels per day.Oil’s economic impact has already been enormous. The country of around 820,000 people is now the world’s fastest expanding economy. Its GDP grew more than 33% in 2023 and more than 40% in 2024.Exxon said it’s had a positive impact on the country, including employing more than 6,200 people, investing more than $2 billion with local Guyanese businesses since 2015 and spending more than $43 million on community projects.But Red Thread’s Wintress White says people are struggling with sky-high rents and food prices that have doubled or tripled in some cases.
“The reality here is that the oil is not a blessing, it’s a curse and it’s only polluting our environment,” she said.
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