Latin America’s Energy Miracle

Latin America’s Energy Miracle

Recent oil discoveries in Guyana, considered one of the most impoverished countries in South America, position this small territory as one of the world’s leading producers of crude oil and boost its economy as one of the fastest growing in the world for the coming years.

The Caribbean country’s current production exceeds 400,000 barrels per day (bbl/d) and it is estimated that it will produce more than 800,000 bbl/d by 2025. In addition, Guyana has more than 11 billion barrels in total recoverable oil reserves.

From 2015 to the end of 2023, there were at least 46 significant oil discoveries, one of the most recent made by ExxonMobil in the Lancetfish-2 appraisal well of the Stabroek Block (6.6 million acres). The company has a final investment decision for the Whiptail development offshore after receiving the required government and regulatory approvals. The Whiptail, the sixth project on the Stabroek Block, will bring the production capacity to approximately 1.3 million bbl/d.

This company is also the operator of the Canje and Kaieteur offshore blocks. ExxonMobil Guyana Limited is the main operator and owns a 45 percent stake in the Stabroek Block, Hess Guyana Exploration Ltd. owns a 30 percent stake, and CNOOC Petroleum Guyana Limited owns a 25 percent stake.

The International Energy Agency (IEA) highlighted that Guyana accounted for seven percent of global crude oil discoveries from 2015 to 2023 and could increase oil production by up to 1.3 million bbl/d, the largest increase among all the countries analyzed, becoming the world’s third largest crude oil producer, reaching the market level of the Organization of the Petroleum Exporting Countries (OPEC).

In addition, as a comparative advantage in terms of extraction costs, Guyana would have the capacity to produce the cheapest crude oil in the world, as its daily extraction or pumping capacity is up to four times more efficient than its competitors such as Saudi Arabia. According to the World Bank, oil production in Guyana has low break-even costs, estimated at between US$25 and US$35 per barrel, allowing a relatively high rate of return for oil company investments.

With the boom in oil exploitation, since 2020 the country’s GDP has increased to double digits, reaching a record 62.3 percent in 2022, and raising GDP per capita from US$6,900 in 2020 to US$20,600 in 2023, a figure that will undoubtedly multiply in the coming years. The current GDP per capita far exceeds that of countries like Mexico and Brazil, only comparable to Kuwait, a large traditional crude oil producer.

Under the leadership of President Irfaan Ali, the Guyanese government seeks to allocate a large part of the foreign exchange from the extraction and sale of hydrocarbons to combat poverty and accelerate its transition to the use of clean energy, invest in education, health care, housing, water and sanitation. Furthermore, it intends to allocate resources to renewable energy generation projects such as hydroelectric, solar and wind power, reduce its dependence on hydrocarbons, lower energy costs, and attract industrial and agricultural investment.

Latin America’s Energy Miracle

Because of its small population, the country urgently needs an influx of migrant workers in the short term to meet the demand for its many constructions, infrastructure projects and extractive activities. However, in the medium term, the priority is training qualified labor for the hydrocarbon sector. The objective is to develop and incorporate a mixed workforce with a sense of gender equality and inclusiveness within the different communities.

The Secretary General of the Caribbean Community (CARICOM), Carla Natalie Barnett, PhD, CBE, a Belizean economist and politician, stressed at the Guyana Energy Conference held in the capital city of Georgetown in February, “Member states are introducing gender-responsive budgets and are reforming the necessary legislation to achieve greater equality.” She pointed out, “The data indicate that in the region fewer women than men earn some kind of income, unpaid care work is still carried out predominantly by women and girls, and violence against them continues with great intensity.”

Carla Barnett, PhD, CBE, Secretary General of the Caribbean Community
Carla Barnett, PhD, CBE, Secretary General of the Caribbean Community

Barnett said, “This reflects the continued presence of cultural beliefs, norms and practices that underpin social exclusion and inequalities.” According to the official, “Noting that investing in strengthening equality policies is critical to accelerating progress and achieving their well-being is more crucial than ever on the road to generating prosperous economies and achieving a healthy planet, such as those promoted by the energy sector.”

There are currently 6,200 Guyanese working in the Stabroek Block operations, representing 70 percent of the workforce. The cumulative spending of ExxonMobil Guyana and its contractors with Guyanese suppliers since 2015 exceeded US$1.5 billion at the end of 2023.

In addition, it is planned in the medium term to develop a local supply chain, involving small and medium-sized enterprises directly related to extractive activity, and to invest in local communities to achieve the gradual and sustainable development of human, social and economic capacity in Guyana.

Sharlene Seegoolam, Managing Director of SLB in Guyana, Trinidad & the CaribbeanSunaina Pai Ocalan, Senior Director of Corporate Strategy and Climate Change for Hess Corporation
Pradeepa Bholanauth, Senior Director for Climate and REDD+ at the Ministry of Natural Resources in Guyana
Jane Miller, OBE, British High Commissioner to the Co-operative Republic of Guyana

At the recent Guyana Energy Conference, the President of Guyana underscored the country’s ambition to be low carbon, noting that Guyana is investing in renewable energy and working to decarbonize its national economy. However, “The reality is that the world is still running on fossil fuels,” he stated. In particular, he called for a more balanced and realistic international debate around three core challenges facing countries today: climate change, food security and energy security.

Carbon Credits: Guyana’s Other Wealth

What if a country’s forests were worth more intact than cut down? That is what is starting to happen in Guyana, a world leader in carbon credits due to its vast tropical forests, even at the height of the offshore oil boom. Guyana’s first carbon credits, which have been a long time in the making, have begun to bring revenue to the country thanks to an agreement signed last December between the Guyanese government and a consortium of oil and gas companies exploiting Guyana’s maritime resources. Hess Corp. has agreed to buy 37.5 million carbon credits from Guyana for a minimum of US$750 million between 2022 and 2032.

Guyana’s Vice President Bharrat Jagdeo recently stated in his address to the international Energy Conference, “Fifteen percent of Guyana’s carbon credit revenues will go directly to Amerindian villages in the interior of the country, in recognition of the stewardship role they have played over forests.” (Almost 90 percent of the country is covered by humid tropical forest.)

Guyana, which is part of the Amazon basin, has about 18 million hectares of mostly old-growth forests, a geographic area larger than Uruguay or the U.S. state of Florida. These forests store about 20 billion tons of carbon dioxide and absorb about 154 million tons from the atmosphere each year, according to government figures.

In his remarks, President Ali emphasized, “The world must make more progress in recognizing the economic value of stored carbon and caring for biodiversity.” He added that this is a visionary, proactive, sustainable point of view of our natural resources, and he hopes it will become a global model of sustainability.

“What if we use our forests to fight climate change? Would there be enough global incentives to allow us to compete with an alternative use of forests? It is clear that we would have to find a balanced model, which would allow people to earn a decent living, but at the same time allow us to preserve forests because, if we don’t, we will never reach the goal of net zero,” he concluded.

The discovery of oil has generally been a blessing for Guyana. But the country must find a path to avoid the resource curse that has plagued oil-producing countries, which have relied too heavily on limited and unpredictable natural resources, abandoning other areas of the economy.


Alliance for Energy and Climate in Latin America-ECPA. Guyana’s Other Natural Resource. Editorial staff. March 28, 2024.

Caribbean Community-CARICOM. CARICOM welcomes progress and points to gender challenges. March 8, 2024.

Duque Márquez, Iván. How Guyana Became Latin America’s Leading Development Laboratory. April 11, 2024.

ExxonMobil Corporation-Guyana. 2023 Annual Report.

ExxonMobil Corporation. ExxonMobil Guyana moves forward with sixth offshore development. April 12, 2024.

Salazar Castellanos, Daniel. Guyana and Oil. Bloomberg Line. November 27, 2023.

Author profile

Angela Levy was born in Colombia and became a U.S. citizen in 2012. She is now a dual citizen of the two countries. She holds two master’s degrees, an MBA and another in accounting. Levy worked as a production engineer in Colombia before moving to the U.S., where she worked in the finance and accounting group at Halliburton for a decade. She later worked with special needs children for five years. Levy now spends her time traveling the western U.S. 

Author profile

Carlos Arturo Toro is a native of Colombia. An economist, he holds a master’s degree in finance. For more than 15 years, he was dedicated to the banking sector, as a credit analyst for Banco Popular de Colombia and as the national director of credit of various financial institutions. For several years after finishing his career in the banking sector, Toro worked as a tropical glacier guide and, periodically, as a volunteer park ranger for the Colombian National Park.

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