In the murky deep waters off South America’s northern coast, an energy revolution is quietly reshaping global oil markets and reviving old geopolitical rivalries. Beneath the Atlantic Ocean, just over 100 miles (160.93 km) from the rainforest coast of Guyana, ExxonMobil has tapped into a reserve so vast it is transforming a once-overlooked nation into one of the world’s most significant oil frontiers.
The discovery, nearly 11 billion barrels of crude, came in 2015 and quickly altered Guyana’s trajectory. In less than a decade, the country of 820,000 people has become the fastest-growing producer on Earth, according to CNN. Now pumping around 650,000 barrels per day, Exxon and its partners — the U.S.-based Hess Corporation and China’s CNOOC — are planning to more than double that volume by 2027.
Oil’s quiet redrawing of south american alliances
Guyana, bordered by Venezuela to the west and Brazil to the south, sits in a neighborhood long marked by political turbulence and energy competition. Venezuela, once the region’s dominant oil power, has seen its sector crippled by U.S. sanctions and domestic dysfunction. In that vacuum, the United States has steadily bolstered its presence in Guyana, where Exxon’s operations offer a new energy stronghold just across the border from Caracas.
The American stake in Guyana’s oil reserves is more than economic. The country’s stability, combined with its location and openness to Western investment, has made it an ideal platform for expanding U.S. energy interests in South America. As the government of President Mohamed Irfaan Ali deepens ties with Exxon, Washington has quietly supported Guyana’s emergence as a regional energy node — a strategic shift with long-term implications.
Prosperity at a cost
In Georgetown, government leaders describe the oil boom as a path to modernization. President Ali, who took office in 2020, has promised that the country’s newfound wealth will support infrastructure, healthcare and climate adaptation. “Every Guyanese will benefit,” his predecessor, President David Granger, said in 2019. That promise has become a central narrative in Guyana’s national politics.
The reality, however, is more complex. Inflation hit 6.6 percent in 2023, with spikes in housing and food prices affecting low- and middle-income families. “Since the oil extraction began in Guyana, we have noticed that our cost of living has gone sky high,” said Wintress White, a member of the women-led organisation Red Thread. “The money is not trickling down to the masses.”
Despite an eye-popping 40 percent GDP growth in 2024, many Guyanese remain unconvinced that the oil windfall is delivering broad-based improvements. Exxon has reported creating more than 6,200 jobs and investing $2 billion with local businesses since the discovery, but residents say the boom has led to rising inequality and social discontent.
A lopsided deal under scrutiny
Much of the criticism centers on the 2016 production-sharing agreement between Guyana and ExxonMobil. The deal, signed under a previous administration, allows Exxon to recover up to 75 percent of its investment from revenues before splitting the remaining profits — half to the company and half to the government. Guyana also receives a 2 percent royalty.
“The reality here is that the oil is not a blessing, it’s a curse and it’s only polluting our environment,” White said. President Ali has acknowledged that the agreement is not ideal, calling it “a bad deal” in a BBC interview. Still, he has rejected the idea of renegotiating the terms, saying the country must honor existing contracts. Future contracts, he said, would be held to different standards.
For Exxon, the terms are considered “globally competitive for countries at a similar stage of exploration,” according to a company spokesperson. The government says oil profits now generate roughly $1 billion annually and have contributed $6.2 billion to Guyana’s natural resource fund.
Environmental fault lines and legal battles
Guyana’s rise as an oil exporter comes with an added paradox. It remains one of only a few nations classified as a carbon sink — storing more greenhouse gases than it emits, thanks to its dense forests. In 2009, the country signed a $250 million agreement with Norway to preserve its 18.5 million hectares of forest.
Still, some argue the country is squandering its environmental legacy. Melinda Janki, who drafted Guyana’s Environmental Protection Act in the 1990s, is leading a legal campaign against Exxon. She contends the oil boom has endangered both ecosystems and public accountability. In 2023, a Guyanese court ruled that Exxon must accept unlimited liability for oil spills — a landmark decision that the company is now appealing.
Janki dismissed Exxon’s $2 billion spill guarantee as insufficient. “It’s too late to do oil,” she told CNN. “The only people who are going to make money from this are Exxon and the oil companies.” Exxon says its commitment supplements existing insurance policies and a strong balance sheet.
