Guyana at a Turning Point: Oil and Security

May 6, 2020 | Andrew Holland
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Five years ago, Guyana moved to the center of the oil world when a consortium led by ExxonMobil announced the first of a series of major offshore oil discoveries in its waters. Put together, these finds indicated that oil output could swiftly rise to nearly 700 thousand barrels per day by 2030. At such a level, it would rank ahead of OPEC countries like Ecuador, Equatorial Guinea, or Gabon. And its low population means that, on a per-capita basis, Guyana will become as important – and wealthy – as Gulf-state kingdoms like Kuwait.

In October 2018, I wrote a report for ASP about Guyana, saying that this small country was given an opportunity to build sustainable security by these oil finds. It could use its newfound wealth to create a society that would be equitable, use the wealth to protect its unusually pristine environment, and show a model to the Caribbean and South American nations for how to lead.

On December 20, 2019, oil started flowing from Guyana’s offshore platforms to markets. But the government had not set up the rules of its sovereign wealth fund to ensure equitable resource sharing. There were few coherent plans for how to prevent “Dutch Disease” from afflicting the currency. The ambitious Green State Development Plan was little more than the words on the paper.

Since then, homemade and global problems have compounded the challenges. The twin global crises of an oil price collapse and the Coronavirus have severely impacted global oil demand and prices. A long-awaited election was marred by cheating and ballot-stuffing.