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.