REbecca Parasnath, 23, lives in a wooden house on stilts on the outskirts of Georgetown, Guyana, with no electricity or sewer system. Like much of the city, her Wortmanville neighbourhood is about six feet below sea level and protected by the Kingston Breakwater, a 280-mile-long barrier built in 1860 to keep the ocean out.
Georgetown is one of the world's most vulnerable capital cities to severe flooding and rising sea levels: in 2005, the city was hit by flooding that affected 290,000 people, evoking a name in Guyanese indigenous language that means “land of many waters.”
Still, Parasnath pins her modest hopes for a better life on Guyana's new promise of oil and gas — the same fossil fuels that are causing the climate crisis. Like many, she's hoping to receive a $5,000 cash grant from the government, some land in an urban area to build her house in a safer place, and a scholarship to go to university. “The government keeps saying they're going to give us money from oil, right?” Parasnath says, just a little skeptical.
Since American multinational ExxonMobil discovered oil in Guyana in 2015, then one of the poorest countries in the Americas, the country of 800,000 has rapidly risen through the ranks of countries with the highest GDP per capita, thanks to one of the world's fastest growing economies.
In 2023, “Latin Qatar's” GDP grew by 33% and is expected to grow by a further 34% in 2024. Oil royalties and exports contributed about $1.62bn (£1.27bn) to the government's annual revenue last year, but are forecast to rise to $2.42bn by 2024 and $7.5bn by 2040 – enough to significantly boost the state budget, estimated at $5.49bn in 2024.
In the decade since ExxonMobil discovered the Liza field, 190 kilometers (118 miles) off the coast of Guyana, the country has emerged as a new global oil power. The former British colony occupies about 90 percent of the United Kingdom's land area but has only 1.2 percent of its population. Guyana's oil reserves are estimated at 11 billion barrels, 75 percent of those of its giant neighbor, Brazil.
The International Energy Agency estimates that offshore discoveries could increase Guyana's 2022 production of 250,000 barrels per day five-fold by 2030.
That makes Guyana a major player in the Latin America and Caribbean oil rush: Half of the countries in the region – 16 of 33 – are involved in new large-scale oil and gas extraction projects as global discussions continue about transitioning away from fossil fuels.
GUyana is betting on oil as global production and consumption steadily rises. With global oil markets bullish, many in the global south are wondering why Guyana, Ecuador, Brazil, Argentina and Mexico are not expected to develop such a valuable commodity.
Guyana's Finance Minister, Ashni Singh, argues that the country has a moral right to exploit its own resources. He claims that Guyana developed the first low-carbon development strategy “long before oil was discovered,” making the country “a unique player in oil development and environmental protection.”
Under the strategy, Guyana signed a $250 million, five-year agreement with Norway to seek revenue for maintaining its forests. The funding supported a monitoring, recording and verification (MRV) system for the transition to a low-carbon economy and participation in carbon markets. Guyana then became the first country to combine its forest conservation efforts with a global carbon trading mechanism to certify carbon credits, Singh said.
“The journey of ExxonMobil coming to Guyana, starting exploration and ultimately discovering oil was a sustained effort to diversify our pre-oil economy,” Singh said. “Our low-carbon strategy is not a response to Guyana becoming an oil producer.”
He says oil royalties will not eliminate low-carbon policies but will instead promote sustainable development strategies.
“Oil has helped us get closer to our goal of every Guyanese being able to live comfortably, have a good job, have good social services and educate their children,” he said. “We want Guyana to be the first truly developed country in South America.”
According to Yesim Oluc, the UN Resident Coordinator in Georgetown, Guyana's situation is truly unique: a developing country with low deforestation rates, 97 percent of the country's Amazon rainforest remains intact, and it sees opportunities for oil and gas-based development. Oluc praises the government's drive for an energy transition that sees oil and gas royalties being invested in hydroelectric and renewable energy sources.
“Because Guyana is a small developing country, it emits zero greenhouse gases,” Olk said. “Even with increased oil production, Guyana will still have negative carbon emissions, according to government calculations.”
“The oil that Guyana produces creates emissions in other parts of the world.2 “The global problem of carbon dioxide emissions is virtually zero. The question is whether the global economy will stop consuming oil.”
ohOil and gas exploration has widespread support. It is difficult to find anyone in business, politics or civil society who opposes it. Chamber of Commerce president Kester Hutson is enthusiastic about Guyana's rapid economic development.
“What we're experiencing now with the oil and gas sector entering the economy is something we never imagined,” he said, adding that he is confident the environment will remain a top priority. “It's not something we need to worry about in the near term.”
Even critics of President Mohamed Irfaan Ali recognize the benefits of fossil fuels. Opposition Leader Aubrey Norton has criticized the royalties and terms of the contract signed with ExxonMobil and the policy of sharing oil profits, but he has not questioned the exploitation of oil. “Oil gives us the resources to develop the country. The downside is that we have a government that is not focused on the development of Guyanese people,” Norton said.
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For Jean La Rose, a Goldman Prize winner who fights for the rights of indigenous peoples, known as American Indians, the exploitation of fossil fuels is a “very difficult issue.”
“Guyana faces a lot of economic challenges,” she says, “and our indigenous communities need a lot of infrastructure and other forms of development to improve health care and education. So utilising our natural resources helps in some way.”
“But when you exploit natural resources, [previously] Oil and gas extraction, in the form of gold, diamonds and other mineral extraction, has had negative impacts on land and environmental rights, pollution and social issues, even if it has benefited some indigenous communities.”
But many Guyanese are critical of how successive governments have handled the oil boom and distributed the revenues. President Ali's government is often accused of favouring Indo-Guyanese and discriminating against black and Native American people. The ExxonMobil contract is also a sensitive issue.
“The relationship between the oil companies and the Guyanese government shows no respect for the people,” said Frederick Collins, president of the Guyana Transparency Institute. “The government is siding with the oil companies against the people, as the lawsuit against the way the Environmental Protection Agency is being run has made clear.”
Another recurring accusation is the government's disregard for legality in infrastructure development projects. Former lawyer Elizabeth Dean Hughes fought eminent domain for a gas pipeline project that ran through her family's land. After a lawsuit, the pipeline was fixed, but the clashes with the government left the impression that the state would ignore the law to get the project done. “It's all about the rule of law,” she says.
The Guardian contacted President Ali, Vice President Bharrat Jagdeo and Prime Minister Mark Phillips multiple times for comment on the allegations but none responded. Alistair Routledge, president and general manager of ExxonMobil Guyana, also did not respond to a request for an interview.
isDespite the complaints, the pace of Guyana's growth is visible on the streets. Georgetown still faces severe infrastructure shortages, but trucks carrying construction materials and workers on new highways are everywhere, as are hotels, shopping malls and luxury homes in gated neighborhoods. New hospitals and schools are being built in and around the capital as part of the president's public service pledge.
“Our capital city's GDP per capita increased by 63 percent in 2022 and about 40 percent in 2023. Capital works and infrastructure growth are progressing at a rapid pace,” Georgetown Mayor Alfred Mentore said.
But the whole story isn't solved, Mentore said: “We need to make sure that the people at the bottom benefit from this kind of trickle-down effect, not just the people who drove the growth.”
And the debate over who will benefit from the money of the new oil rush has become a hot topic. A common question is whether Guyana can become a prosperous, egalitarian country, or just another country that produces fossil fuels for the benefit of a few.
“People in government are optimistic, but ordinary people are skeptical,” said Coretta MacDonald, a teacher and trade unionist who was elected to the opposition on a platform of new wealth distribution. “For now, at least, people on the street aren't feeling the tangible benefits of oil.”
In a country where food prices are soaring – a meal at a fast-food chain can cost as much as £25 – many feel they are paying the environmental costs of oil and gas exploration while not enjoying the benefits of economic growth.
Mark Murray, a 38-year-old construction worker considering emigrated: “You can't support your family as much as you'd like. The average person in Guyana can't survive on $20 a day.”
