Transformative oil boom prompts scramble for spoils
ANN’S GROVE, Guyana — Villagers in this tiny coastal community lined up on the soggy grass, leaned into the microphone and shared their grievances as someone in the crowd yelled, “Speak the truth!”
And so they did. One by one, speakers listed what they wanted: a library, streetlights, school buses, homes, a grocery store, reliable electricity, wider roads and better bridges.
“Please help us,” said Evadne Pellew-Fomundam — a 70-yearold who lives in Ann’s Grove, one of Guyana’s poorest communities — to the country’s prime minister and other officials who organized the meeting to hear people’s concerns and boost their party’s image ahead of municipal elections.
The list of needs is long in this South American country of 791,000 people that is poised to become the world’s fourth-largest offshore oil producer, placing it ahead of Qatar, the United States, Mexico and Norway. The oil boom will generate billions of dollars for this largely impoverished nation. It’s also certain to spark bitter fights over how the wealth should be spent in a place where politics is sharply divided along ethnic lines: 29% of the population is of African descent and 40% of East Indian descent, from indentured servants brought to Guyana after slavery was abolished.
Change is already visible in that country, which has a rich Caribbean culture and was once known as the “Venice of the West Indies.” Guyana is crisscrossed by canals and dotted with villages called “Now or Never” and “Free and Easy” that now co-exist with gated communities with names like “Windsor Estates.” In the capital, Georgetown, buildings made of glass, steel and concrete rise above colonial-era wooden structures, with shuttered sash windows, that are slowly decaying. Farmers are planting broccoli and other new crops, restaurants offer better cuts of meat, and the government has hired a European company to produce local sausages as foreign workers transform Guyana’s consumption profile.
With $1.6 billion in oil revenue so far, the government has launched infrastructure projects including the construction of 12 hospitals, seven hotels, scores of schools, two main highways, its first deep-water port and a $1.9 billion gas-to-energy project that Vice President Bharrat Jagdeo told The Associated Press will double Guyana’s energy output and slash high power bills by half.
And while the projects have created jobs, it’s rare for Guyanese to work directly in the oil industry. The work to dig deep into the ocean floor is highly technical, and the country doesn’t offer such training.
Experts worry that Guyana lacks the expertise and legal and regulatory framework to handle the influx of wealth. They say it could weaken democratic institutions and lead the country on a path like that of neighboring Venezuela, a petrostate that plunged into political and economic chaos.
“Guyana’s political instability raises concerns that the country is unprepared for its newfound wealth without a plan to manage the new revenue and equitably disburse the financial benefits,” according to a USAID report that acknowledged the country’s deep ethnic rivalries.
A consortium led by ExxonMobil discovered the first major oil deposits in May 2015 more than 100 miles off Guyana, one of the poorest countries in South America despite its large reserves of gold, diamond and bauxite. More than 40% of the population lived on less than $5.50 a day when production began in December 2019, with some 380,000 barrels a day expected to soar to 1.2 million by 2027.
A single oil block of more than a dozen off Guyana’s coast is valued at $41 billion. Combined with additional oil deposits found nearby, that will generate an estimated $10 billion annually for the government, according to USAID. That figure is expected to jump to $157 billion by 2040, said Rystad Energy, a Norwegian-based independent energy consultancy.
Guyana, which has one of the world’s highest emigration rates with more than 55% of the population living abroad, now claims one of the world’s largest shares of oil per capita. It’s expected to have one of the world’s fastestgrowing economies, too, according to a World Bank report.
The transformation has lured back Guyanese such as Andrew Rampersaud, a 50-year-old goldsmith who left Trinidad last July with his wife and four daughters, encouraged by changes he saw in his country.
He makes some 20 pairs of earrings and four necklaces a day, mostly with Guyanese gold, but where he’s really noticed a difference is in real estate. Rampersaud owns seven rental units, and before the oil discovery, he’d get a query every month or so.
Now, three to four people call daily. And, unlike before, they always pay on time in a country where a two-bedroom apartment now costs $900, triple the price in in 2010, according to Guyana’s Real Estate Association.