Guyana’s Pending Oil Boom—or Bust

Guyana’s Pending Oil Boom—or Bust
Guyana’s president, David Granger, second left, arrives at Punta Cana International Airport in the Dominican Republic, Jan. 24, 2017 (AP photo by Tatiana Fernandez).

After years of impoverishment, Guyana is suddenly on the verge of prosperity. Since 2015, a consortium led by Exxon Mobil has developed at least 10 deepwater oil wells off Guyana’s shores, with a combined productive capacity of around 750,000 barrels per day. Exploration is ongoing, with most experts anticipating the country’s oil reserves exceed the current estimate of 5 billion barrels. One way to grasp the magnitude of these discoveries is that in 10 years, Guyana, with a population of slightly less than 800,000, could pump nearly a barrel of oil per person each day—more production on a per capita basis than Saudi Arabia today.

Still, there are unrealistic expectations. Take the prediction of Guyana’s minister of natural resources that, thanks to an oil-backed sovereign wealth fund in the works, “Each Guyanese is going to be a U.S.-dollar millionaire, or worth that, in a few years.” Of course, the spectrum of disasters linked to sudden oil windfalls, from Angola to Nigeria to next-door Venezuela, suggests otherwise. The oil curse hangs over Guyana, with risks of inflation, corruption and inequality, among other things. Apparently aware of these traps, the government has not saddled itself with excessive borrowing ahead of the likely surge in petrodollars.

Yet disputes over how to manage this budding oil industry have spilled into Guyanese politics, with a vote of no confidence in President David Granger in late December, driven by a backlash over how his government handled oil contracts. “They sold our patrimony” to Exxon Mobil, opposition leader Bharrat Jagdeo of the People’s Progressive Party said of Granger’s government. Although the vote triggered new elections within three months, the government is challenging it in court, adding to the political uncertainty.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.

More World Politics Review