In Georgetown, Guyana’s capital, heavy trucks rumble through streets as oil wealth fuels the construction of bridges, artificial islands and luxury hotels. Foreign workers are already dubbing it “the new Dubai”.
US-based ExxonMobil dominates oil production in Guyana through its subsidiary Esso, leading operations at the Stabroek offshore block alongside Hess and China’s CNOOC. Since discovering massive reserves in 2015, it has expanded rapidly, with production now at 650,000 barrels a day and set to double by 2027. But it has also been facing lawsuits and allegations of ignoring environmental rules to boost output.
“Our institutions have been captured by foreign interests. Exxon isn’t the only one, but it’s certainly the most egregious,” says environmentalist Sherlina Nageer, founder of the Greenheart Movement, an initiative that advocates alternatives to the oil industry, and one of the main voices opposing fossil fuel exploration in Guyana.
The nation is solidifying its status as a “petro-state,” with its economy, political decisions, and institutions becoming increasingly intertwined with the oil industry. The line between the state and ExxonMobil is blurring, making it harder to distinguish where one ends and the other begins.
Irregular gas flaring in Guyana
ExxonMobil has faced scrutiny for gas flaring — the burning off of gas produced during oil drilling, which emits large amounts of carbon dioxide and methane — at Liza Phase 1, the first of three oil fields in operation. Opened in December 2019, the field’s license allows flaring only during maintenance or emergencies.
Yet from 2019 to 2023, the company reported 1,298 flaring events, according to data analysed by the Every Last Drop project, using SkyTruth satellite monitoring. Additionally, using data from the environmental rights organisation Arayara Institute, the analysis also found that ExxonMobil flared 687 million cubic meters of gas off Guyana’s coast during this period, releasing 1.32 million tons of CO2 — equal to the yearly emissions of 287,000 cars. Guyana now ranks as the Amazon’s second-largest emitter from flaring, after Ecuador.
Sherlina Nageer is among activists who say they have gathered evidence of illegal activities using satellite images. In April 2021, they alerted the Guyana Environmental Protection Agency (EPA), which oversees and licenses the nation’s oil industry.
One month after the complaint, the EPA revised the oil company’s environmental permit, extending the allowable flaring period from three to 60 consecutive days – a process activists say lacked transparency. The revised permit levies a USD 45 charge for each ton of emitted CO2.
“Now the government is basically saying, ‘Pollute as much as you want, provided you can pay for it,’” says Vincent Adams, a former director of Guyana’s Environmental Protection Agency and an official at the U.S. Department of Energy for 30 years.
When he assumed leadership of the Guyanese agency in 2018, Adams says he inherited an institution ill-equipped to regulate the oil industry: “There wasn’t even one engineer trained in oil.” He recalls the agency functioned merely as a “rubber stamp” for requests from ExxonMobil and its partners.
In 2020, as Esso sought a license for the Payara field, the country’s third oil project, Adams demanded financial guarantees for environmental damages. He says all three project studies were nearly identical and warned that a spill could reach Venezuela’s coast and the Caribbean.
Adams left the agency in August 2020, with the change of government in Guyana, and recalls that only a month later the licenses were granted. “When I left, they took over,” says the engineer, who has since become one of the main critics of the current oil exploration model in the country.
Unfavorable contract for Guyana
Controversies over Guyana’s oil deals began well before licenses were issued. After ExxonMobil’s 2015 discovery, the government drafted the Stabroek Block contract from scratch. It stipulates that up to 75% of monthly revenue will cover the costs of the companies involved, with the remainder split 50/50 with the government — giving Guyana a 12.5% share. The deal also includes a 2% royalty, far below rates in countries like Brazil (up to 15%) or the U.S. (over 16%).
“It’s a very bad contract that deprives us of a lot of resources,” said Guyana’s former president, Donald Ramotar. During his tenure from 2011 to 2015, ExxonMobil made its first major discovery.
While he shares the same political affiliation as President Irfaan Ali, he supports revising the contract clauses. Ali acknowledges the agreement’s unfavorable terms but insists that the “sanctity of the contract” must be upheld.
Frederick Collins, head of Guyanese anti-corruption organisation Transparency Institute, is a vocal critic of the Exxon contract, calling it “strongly favourable to Exxon”. His group has published several critiques and sued the government and the oil company over the lack of financial guarantees for spills in the contract — and won. In May 2023, the Supreme Court ruled that the EPA’s failure had put the country at “grave risk of a calamitous disaster”.
Esso and the Guyanese government appealed the ruling, estimating the cost of environmental damage coverage at USD 2 billion. In June, the appeals court sided with them and suspended the previous decision.
Collins called the sum derisory to address the oil spill’s impact. He cited the 2010 Gulf of Mexico spill, which resulted in BP and its insurers paying USD 69 billion in reparations.
InfoAmazonia repeatedly reached out to contact ExxonMobil, its Guyanese subsidiary Esso, as well as Hess, CNOOC, and the Guyanese government. None responded by the time of publication.
Communities are concerned
Coastal and Indigenous communities near Georgetown are apprehensive about the expanding oil industry. In Hope Beach, 25 kilometres from Georgetown, sits a graveyard of abandoned boats. “They were used for fishing,” says fisherman Amran Samad, “but people put them up for sale and nobody wanted to buy them.”
Oil extraction has disrupted local fishing, according to locals. They report that heavy ship traffic and vibrations from offshore operations drive away shoals. Meanwhile, an influx of cheap imported fish, linked to the arrival of more foreigners, has intensified competition and reduced demand for the local catch.
In St. Denny’s, an Indigenous community 100 kilometers from Georgetown, Councillor Donnet Frederick showcased a vegetable greenhouse funded by carbon credit sales.
“Our community received 80 million Guyanese dollars [about USD 400,000] from carbon credit projects. This money was used to create a farm, build a greenhouse and renew our production,” he says.
In December 2022, Guyana signed an agreement with Hess Corporation, part of the ExxonMobil-led consortium, to sell 37.5 million carbon credits over a decade. The project encompasses all of the country’s forests, covering nearly 90% of its territory and home to Indigenous communities.
You can’t just pour money into communities without considering the cultural and environmental impactsTrevon Baird, professor of the University of Guyana
By 2032, Hess is required to pay the Guyanese government a total of USD 750 million, with a commitment that 15% of the funds will be allocated to traditional communities. But Indigenous leader Mario Hastings claims that the communities were seduced by financial promises and were not properly consulted.
Hastings served for several years as the chief of the Kako village in the Essequibo region, an area recently embroiled in a territorial dispute with Venezuela. He said that in 2022, while still in office, he participated in a council meeting of chiefs in the capital, where the carbon project proposal was introduced.
“We received numerous pages in English, filled with technical jargon, and they demanded an immediate response,” says Hastings. Guyana’s Indigenous communities primarily speak their native languages, not English, in their daily lives. “We couldn’t present the proposal to our people. I refused, saying I couldn’t do that to my people,” he recalls. Ultimately, Hastings was overruled by the council.
In 2024, the Association of Amerindian Peoples (APA) and other groups reported that Guyana’s carbon project violated Indigenous safeguards by including all national forests in its certification.
The Every Last Drop project has also found that, alongside offshore production, there are onshore exploration areas that overlap with 13 Indigenous territories and one nature reserve in Guyana.
Anthropologist Trevon Baird, a professor of the University of Guyana, questions the carbon credit concept of “progress,” warning against the plan’s methods. “You can’t just pour money into communities without considering the cultural and environmental impacts,” he says.
From colony to oil: foreign exploitation
After centuries of colonisation and decades of dictatorship that ended only in 1992, Guyana remained poor and dependent on agriculture. Foreign oil companies drilled more than 40 dry wells before ExxonMobil’s breakthrough in 2015, just after a presidential election.
ExxonMobil had nearly withdrawn their operations, sidelining the country for some years. Shell, which held a 50% stake in the Stabroek Block, abandoned the project in 2014, just before the pivotal drilling. Since then, over 30 discoveries have revealed an estimated 11 billion barrels of oil, valued at USD 1 trillion.
Despite 65% of GDP growth in 2022 being driven by oil, poverty remains widespread in Guyana, with 43% of the population living on less than USD 5.50 a day, according to the UN Economic Council. Unemployment stands at 14%, among the highest in Latin America. Major infrastructure projects, like the Demerara River bridge, are being built by Chinese firms using mostly foreign labour.
With the discovery of oil, ExxonMobil began to invest heavily in advertising to shape its image in the country. In a downtown Georgetown shopping mall parking lot, a comedian announced that the oil company would distribute 100,000 Guyanese dollars (about USD 478) to each adult citizen — equivalent to less than two minimum wages here.
“I want to give Exxon a round of applause because they are transforming this country. That’s why we’re going to put 100,000 in each of your pockets,” he stated at an event attended by this reporter in November 2024.
In fact, the payments to citizens were made directly by the Guyanese government. Funded by oil revenues, it represents the first such disbursement since ExxonMobil began operations in the country over five years ago, and the last currently planned.
Power outages are constant in Georgetown. Despite the large reserves, most of the oil extracted in Guyana goes to the United States and European countries. “We’re used to power cuts, but over the years they’ve become more frequent,” says resident Minerva Cort.
Meanwhile, funded by oil revenues, Guyana is planning Silica City — a futuristic, high-tech urban hub 40 kilometres from Georgetown. While details remain vague, President Irfaan Ali has promoted it as a resilient, modern and sustainable city “ahead of its time,” in a 2024 public address.
The grandiose future touted by the national government and oil companies clashes sharply with the daily reality of many Guyanese. More than 90% of Guyana’s population lives below sea level. Georgetown’s canals, designed to control tidal effects, are choked with sewage, fast-food containers, and soft-drink bottles. Tap water is heavily contaminated.
For now, the city’s highest point remains the ever-growing landfill. From atop this mountain of waste, one can gain a privileged view of a future that never comes.
This article was first published on InfoAmazonia, and this shortened and edited version appears here with permission. The story is part of the Every Last Drop series, a project with the support of the Global Commons Alliance, sponsored by Rockefeller Philanthropy Advisors. It was produced by InfoAmazonia’s Geojournalism Unit, which also has the support of the Serrapilheira Institute.
