2023-12-04 10:30:02
At a time when COP 28 is seeking to move away from fossil fuels, a country is choosing on the contrary to rely on the exploitation of its fabulous black gold reserves to develop. This is the recent history of Guyana, an emerging oil power which arouses much desire. Among others, that of neighboring Venezuela.
“Speed up production”! This is the instruction given by President Irfaan Ali to the boss of the American company Chevron when he bought 30% of the blocks in operation a few weeks ago. The Hess company associated with Exxon discovered this new goose that lays golden eggs in 2015. Eleven billion barrels of oil buried at the bottom of the Atlantic Ocean 190 kilometers from the coast of Guyana. This country is then classified among the poorest in Latin America, it is also very vulnerable to climate change, threatened by rising water levels. For the authorities, there is no hesitation: we must extract the maximum income from black gold to develop the country and finance the necessary adaptation.
Guyana’s rise is astonishing with the highest growth rates in the world
+68% in 2022, +38% expected this year. GDP has tripled in four years. At this rate, per capita income will have caught up with that of Brazil or Mexico within four years, whereas at the time of the discovery of oil, 40% of the population lived on less than 5 dollars per day. Guyana has the potential to become the fourth largest oil power in the world.
Money is flowing freely in the former British colony, but not yet in the pockets of the 800,000 inhabitants
Exxon’s money is everywhere. From sports fields to universities and training for the underprivileged. Construction sites are springing up like mushrooms. A deep-water port, two highways, a dozen hospitals, hotel complexes. But purchasing power is declining. Unable to find a locally trained workforce in the oil sector, Exxon recruited expatriates. Their arrival has pushed up the prices of real estate, and especially basic foodstuffs, while the wages of locals have stagnated, with the exception of those working in the construction sector.
Is the raw materials curse looming over Guyana?
The hyperdevelopment of the oil industry absorbing capital without creating jobs and shared growth is a real risk. Associated with many other faults linked to the history of the country. Like corruption, political divisions and lack of expertise of leaders. By negotiating in secret a sharing of oil revenues which turns out to be more favorable to the American company than to the State, the government has given the feeling of having ceded power to Exxon. The fate of neighboring Venezuela could enlighten Guyana on the vagaries of black gold. It was an oil giant. It declined after the nationalization of hydrocarbons. Today it is a hard-pressed state that claims half of Guyana’s territory, Essequibo, the border region rich in black gold. A choice validated yesterday by a referendum.
Read alsoVenezuela: as expected, the referendum is a massive yes to the attachment of Essequibo
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