China’s growing investments in Guyana is causing concerns among experts, as the South American country experiences uncertainty surrounding its president and its massive offshore oil reserves.
Guyana’s coalition government under President David Granger fell after a no-confidence vote in the National Assembly in December last year. According to Reuters, the opposition accused Granger’s government of mismanaging the country’s oil resources by granting ExxonMobil overly generous terms in its contract for extracting oil. Under an agreement signed in 2018, Guyana and ExxonMobil each would get 50 percent of the oil profits.
Oil Exploration
ExxonMobil made the discovery of an oil reserve at Stabroek Block, 6.6 million acres in size and located about 120 miles offshore from Guyana in 2015. The company announced in December 2018 that the reserve could hold more than 5 billion barrels. Commercial oil production is expected to begin by early 2020, and output could reach 750,000 barrels per day by 2025, ExxonMobil has said.
Notably, China’s state-owned China National Offshore Oil Corporation owns a 25-percent stake in the ExxonMobil-led coalition to develop Stabroek Block.
While Guyana currently isn’t an oil-producing nation, its newly discovered oil reserves would place the country as one of the world’s top producers. Given that the country is one of the poorest nations in the Western Hemisphere, observers have speculated as to whether or not the oil reserves can turn its economy around.
Granger’s government announced that it would challenge the no-confidence vote in court, according to a Jan. 4 article by Reuters. However, if the vote isn’t overturned, a general election will be held before the end of March.
On Jan. 29, Dialogo Chino, an independent journalist platform dedicated to understanding the China-Latin America relationship, published an editorial warning that “China’s footprint in oil and other sectors looks set to grow following Guyana’s general election in March.”
Abena Rockcliffe, a senior journalist at Guyana’s daily newspaper Kaieteur News, told Dialogo Chino that the country’s experience with past Chinese investments has “always left [Guyana] holding the dirty end of the stick”—noting that past projects have seen “very little use of local labour, no transfer of skills, project over-runs and allegations of corruption.”
