By investing in Guyana’s oil industry, the Chinese are taking a longer, multi-generational view.
Guyana, home to just 750,000 people, is about to leap from one of the poorest to one of the richest countries in the world. The financial predators are circling, led by the Chinese. Guyana‘s inexperience, incompetence and lack of Western interest will hand the Chinese a valuable prey.
Oil discoveries off the coast of Guyana are on course to produce about 1 million barrels per day of oil for 30 years. If oil fetches just $50 per barrel, this equates to nearly $500 billion. Guyana’s share of this will be approximately $300 billion; the other $200 billion will go to the Exxon-controlled consortium. The amounts are conservative estimates: New oil discoveries keep coming. Exxon and its partners, Hess and Nexen (the latter owned by the Chinese), landed a very sweet deal.
Guyanese outrage about how its government granted such a stupendously generous package is vocal and growing. The reason is no more than incompetence and sharp Exxon negotiators. But Guyana’s share is still gigantic and could transform the country.
Guyana’s future is most likely either along the Equatorial Guinea path — where a small elite takes all the oil money and the majority remain in poverty — or the Norwegian model. Under the latter, the oil money is invested wisely so that all citizens become wealthy. The majority of Guyanese simply do not understand the consequences of the wall of money about to hit the country — nor does the government, whose development program is muddled, myopic and concerned only with short-term projects.
No leader has outlined a vision to guide this remarkable country out of poverty to a golden future. The government has not even produced a practical national development plan, only a list of well-meaning short-term objectives. Apart from President David Granger, who is a humble and honest ascetic, the rest of his government is hopelessly out of its depth. Granger is about to face a decisive election which, despite a potentially rosy future, he will likely lose to the notoriously corrupt opposition party. As a result, the Equatorial Guinea model is the likely outcome, with a few Guyanese becoming immensely wealthy, and the majority seeing.
