GEORGETOWN, Guyana — Amid the narrow streets and rusty docks of Georgetown, the quiet capital of Guyana, the first signs of an oil boom are visible. Steel pipe destined for deep-water projects can be seen stacked on wharves near the city center. Over at the Marriott, the country’s only five-star hotel, the bar fills up throughout the day with Brazilian oil workers and American contractors. Boats embark from a new depot on the Demerara River, ferrying supplies to oil projects hundreds of miles from the coast.
Driving much of this activity is ExxonMobil. Three years ago, the company’s Guyana subsidiary found crude in sandstone reservoirs about 120 miles offshore, the first of a string of offshore discoveries that have raised the country’s reserves to an estimated 3.2 billion barrels from nothing at all. Decades of dry wells had made such a cache impossible to imagine.
With ExxonMobil expecting “first oil” — that is, to start pumping crude — in 2020, Guyana is bracing for a wave of newfound money to hit government coffers. The government anticipates collecting $300 million in petroleum funds each year from the company’s initial phase of work on a single well — a sum that represents about a quarter of the current national budget. Analysts at a Norwegian energy consultancy are even more bullish, claiming the government could rake in as much as $5 billion per year from oil by the end of the next decade.
That money will go a long way in this sparsely populated former British colony of about 750,000, where political competition between the country’s African- and Indian-descended populations has long stunted development. The country’s needs are many. Guyana’s power supply is erratic, leaving even parts of the capital without electricity at times. Its infant mortality rate is almost double the average of Latin American and Caribbean countries. Its unemployment rate stood at 11.8 percent in 2017, according to the World Bank.
“This is the best thing that has ever happened to Guyana,” Minister of Finance Winston Jordan said in an interview. “I can say that not since perhaps when sugar was introduced in the colonies have [there been] such opportunities for massive transformation of the economy.”
Oil will also generate tremendous pressure on a country known for fragile government institutions, ethnic divisions, and little transparency. The speed and focus with which ExxonMobil and its partners, Hess and China National Offshore Oil Corporation, are doing their work aren’t always being matched by elected leaders in Georgetown, who are moving far more slowly in building government infrastructure to manage the oil industry. Officials insist they have time to develop those institutions.
“We’ve always dreamed,” Jordan said, “but we’ve never had the resources to convert our dreams to reality.” But Guyana’s oil windfall could easily convert the country’s dreams into a living nightmare, one that leaves it with greater inequality, more corruption, and internal strife. Many fear that’s exactly what will happen.
