Black Gold Rush in Guyana: Is the World Really Ready to Abandon Fossil Fuels?

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The oil drilling ship Liza Unity off the coast of Guyana

"There's the new Guyana! Guyana with oil!,” Nicholas Deygooo calls out as the boat heads towards his artificial island. "It wouldn’t be possible without Exxon!” The 41-year-old owner of the new speck of land gestures grandly toward his construction project with both arms. It's worth $300 million, but Deygoo didn’t have to invest even a cent of his own money.

Within just a few months, floating dredgers created some 44 acres of new land, roughly the size of 24 football fields. Such a thing has never been seen before in Guyana, the sparsely populated country on South America’s Atlantic coast, sandwiched between Venezuela and Surinam. The excavators dug up tens of thousands of tons of sand from the seafloor and deposited it here, near the sleepy capital of Georgetown. A few common lanceheads and killer bees have already migrated over from the jungle to Deygoo’s artificial island, which has been given the unromantic name VEHSI.

But Guyana’s fauna doesn’t have much of a future here. The island reeks of diesel, which fuels the heavy machinery. Steamrollers are packing down the sandy ground, diggers are excavating foundations and cranes are moving building supplies. Guyana’s first deepwater port is scheduled to open here even before the new year – a timeline laid out by its only customer, tenant and financier: ExxonMobil.

The world’s largest private oil and natural gas behemoth advanced the entire investment sum to Deygoo and his partners. They are demanding no interest, essentially a means of paying the rent for the coming years. The company urgently needs the deepwater harbor as a logistical hub for its oil drilling operations 200 kilometers off the coast of Guyana. The company’s U.S. executives and the country’s political leadership want to expand production as rapidly as possible before climate protection measures get in the way.

Guyana is the current El Dorado of the oil industry. Enormous oil reserves were discovered off the coast here in 2015, shortly before 200 countries agreed to the Paris Climate Agreement, which was to herald the end of the fossil fuel era. Huge quantities of first-class "light sweet crude” are buried below the ocean floor, highly valued for its low sulfur content and the relative ease with which it can be refined. It’s the best kind of crude oil around. The discovery has even led Venezuelan President Nicolás Maduro to move to annex part of Guyana’s territory to enable it to undertake its own drilling operations.

According to the plans forged by ExxonMobil and Guyana’s government, the country will produce more crude oil per capita than any other country on the planet within five years. Despite the fact that the climate crisis poses a greater threat to Guyana than almost any other country in the world.

Still, hardly anyone here is in favor of simply leaving the oil in the ground, certainly not the country’s political leaders or Deygoo. But even environmental activists support the exploitation of the oil fields now that fossil fuel multis have begun funding local projects. Such funding, though, is a pittance compared to the billions of dollars that the oil will produce. It is a triumph for ExxonMobil and the other companies involved.

In recent years, it looked for a time as though humanity was serious about ending its reliance on fossil fuels. A young movement, led by Greta Thunberg, brought millions of people around the world out onto the streets. "Keep it in the ground,” they chanted, referring to oil, natural gas and coal.

One government after the next pledged that their country would be carbon neutral by the middle of the century. When the coronavirus pandemic kept millions of people from commuting to work or flying around the world, the prices for oil and for oil company stock plunged. Black gold briefly lost its luster.

“With current energy policy, we will not only miss the 1.5-degree goal, we will even miss the 2-degree goal."

Fatih Birol, International Energy Agency

But now? According to a data analysis performed by the London-based Energy Institute on behalf of DER SPIEGEL, humanity has never before burned as much fossil fuel as it is currently. The analysis shows that in 2022, 137 trillion kilowatt hours-worth of oil, coal and natural gas was consumed, more than ever before. "Despite record growth in renewables, the share of fossil fuels in the global energy supply remains stubbornly at 82 percent," says Juliet Davenport, president of the Energy Institute. "The transition is not progressing quickly enough.”

That's why global emissions of greenhouse gases were higher in 2022 than ever before. And this year, they could be even higher. Temperatures around the world are spiking dangerously, flooding and forest fires are growing more and more catastrophic, and Thunberg’s Fridays for Future movement appears to be disintegrating.

With current energy policy, we will not only miss the 1.5-degree goal, we will "even miss the 2-degree goal,” says Fatih Birol, head of the International Energy Agency. "The trend amounts to 2.4 degrees.”

Meanwhile, oil, natural gas and coal companies are doing booming business. And their lobbies are working hard to ensure that it stays that way for as long as possible.

According to the German environmental protection agency Urgewald, 96 percent of the roughly 700 oil and natural gas companies they examined are searching for or developing new deposits. Of those, 539 are currently working to produce crude oil and natural gas amounting to 230 billion barrels (each containing 159 liters) of oil equivalent from as yet untapped deposits. This amount is the equivalent of six years’-worth of consumption at current rates.

The center of this global oil bonanza is Guyana, a poor country rife with corruption. "When I was a child, even toast bread was often not available,” says Nicholas Deygoo, the owner of the new island.

In the capital of Georgetown, both the old and the new Guyana are on full display. A horse-drawn wagon is passed by an SUV as cows graze next to a McDonald’s. In the center of the city, two rather dilapidated colonial-style wooden homes flank the ExxonMobil headquarters, a seven-floor high rise made of glass, steel and cement.

From there, the man many people refer to as the "King of Guyana” can look down at the Ministry of Natural Resources, which is located on the same street. From Britain, 56-year-old Alistair Routledge is ExxonMobil’s representative in the country. "These are the most important conventional oil and gas discoveries of the last 20 years in our industry," he exults. The company believes that the deposits off the coast of Guyana contain at least 11 billion barrels of oil equivalent, more than the amount off the coasts of Norway and the UK combined. At current prices, the country’s oil has a market value of $750 billion.

And Guyana’s government is eager to get its hands on the petro-billions. The money would allow them to further develop the country. It would be enough to replace the country’s pothole-ridden roads with wide, newly paved highways in addition to building bridges, hospitals and schools.

And Guyana’s government is eager to get its hands on the petro-billions. The money would allow them to further develop the country. It would be enough to replace the country’s pothole-ridden roads with wide, newly paved highways in addition to building bridges, hospitals and schools.

The country’s politicians are in a hurry. "It is a race against time,” the country’s president, Irfaan Ali, recently told Al Jazeera in an interview. "We intend to accelerate production.” Ali and his team are concerned that climate rules and new technologies could soon weaken demand for crude oil and devalue his country’s treasure.

Plus, the government also needs the money for the fight against climate change.

Nine of 10 citizens of Guyana live along the Atlantic coast behind more than 400 kilometers of dikes. In some places, salt water has already begun spilling over the barriers and ruining the soil. Sea levels are rising in the region more rapidly than elsewhere, and Georgetown has been located below sea level for centuries.

The capital was once built on swampland, crisscrossed with canals and ditches dug by the country’s former colonial masters from the Netherlands. Even today, locals occasionally see anacondas swimming in the trenches. Among global cities threatened by flooding, Georgetown is right toward the top of the list. The government is planning to build a new capital on higher ground further inland called Silica City.

Guyana also demonstrates the failures thus far of the so-called loss and damage approach, the idea that industrialized nations would provide financial support to countries that are particularly threatened by climate change. In 2009, industrialized nations pledged $100 billion per year in aid, a sum that still hasn’t been achieved today.

Guyana no longer wants to wait. "We need money from the oil and gas sector to climate-proof our country and adapt to climate change,” Vice President Bharrat Jagdeo told the Wall Street Journal in an early November interview.

The big oil companies are pushing ahead. ExxonMobil, Hess and the China National Offshore Oil Corporation have thus far committed to investing at least $40 billion in the Guyana project.

By contrast, the entire sector hardly spent more than $20 billion for renewable energy projects like solar and wind parks last year, according to the International Energy Agency – a number representing just 2.5 percent of capital expenditures. The sector invested almost 40 times that amount in fossil fuel projects. Their traditional business model is apparently still working so well that the oil companies see no reason to invest significant amounts in anything else.

"The oil and gas industry is facing a moment of truth,” says IAE head Birol. "It has to decide between fueling the climate crisis or participating in the transition towards clean energy.”

It is a windy October morning in the Westminster quarter of London. Violet smoke is climbing into the sky in front of the InterContinental Hotel while Greta Thunberg and other climate activists are chanting "Oil Money Out!”, their voices echoing across Hyde Park next door. The activists have their arms linked and are blocking the entrance to the luxury hotel. None of the participants in the Energy Intelligence Forum, one of the fossil fuel sector’s largest meetings, can get in or out.

The meeting of the oil and gas magnates, though, has long since started. The activists outside have proven unable to affect even the timing of the agenda. The lush carpeting swallows up the chanting in front of the hotel and the executives can continue their conversations unbothered, claiming that their interests and the climate crisis are in no way contradictory.

"It’s about reducing the emissions from hydrocarbons rather than cutting production,” says Amin Nasser, head of oil giant Saudi Aramco. Carbon emissions of oil and natural gas, he insists, can be reduced using technologies such as carbon capture and sequestration (CCS). Renewable energies alone cannot "shoulder the global demand for energy,” he says.

$161.1 Billion in Profits in a Single Year

Many people here agree with Nasser. For a number of fossil fuel companies, last year was the most successful in their histories, their profits boosted in part by Russian President Vladimir Putin’s invasion of Ukraine and the ensuing energy crisis, which drove up prices.

Together, the Big Five – the five Western oil and natural gas giants ExxonMobil, Chevron, BP, Shell and TotalEnergies – made profits of almost $200 billion. The state-owned Saudi Arabian company Saudi Aramco earned $161.1 billion in profits. And the world’s largest private coal producer Peabody Energy from the U.S. – a company that was facing bankruptcy just a few years ago – earned more money in 2022 than ever before.

In the years following the Paris Climate Agreement in 2015, the companies also continued exploiting oil, natural gas and coal deposits as though climate change didn’t exist at all. According to a data reporting project of which DER SPIEGEL was a part, more than 70 especially large fossil fuel projects got going after 2015, such as the one in Guyana and the development of natural gas fields above the Arctic Circle in western Siberia, each of which will produce at least a billion tons of carbon emissions over their lifetimes.

The data reporting was conducted together with scientists and enjoyed support from the French non-profit Data for Good and from the collective éclaircies. Publicly available information found in databases, studies and financial statements about oil, natural gas and coal projects from almost 900 companies was examined. An additional 128 huge projects were found to be in the planning stages. If all of the plans laid by the energy companies become reality, they would – according to a conservative estimate – emit almost twice the carbon budget remaining for limiting global warming to 1.5 degrees Celsius.

“Fossil fuels are so comfortable."

James Hansen, climate researcher

"As there is high demand for oil and gas, it may be necessary to replace older fields with decreasing amounts of production with new sources,” says Birol, of the IAE. But, he adds, "their investments in new oil and gas fields are much higher than would be necessary to keep production at the current level.”

Will it not be possible in the end to wean the world from its addiction to oil, coal and natural gas? "Fossil fuels are so comfortable,” says James Hansen, the long-serving climate expert for NASA. One gallon of gasoline contains as much energy as an adult performing 400 hours of manual labor, he says. And much of today’s infrastructure is configured for fossil fuels: power plants that run on coal, vehicles and airplanes that run on diesel, gasoline and kerosene, industrial processes that rely on natural gas.

And the climate-damaging fuels are also heavily subsidized. According to the IAE, governments worldwide spent more than a trillion dollars on such subsidies in 2022.

Back at the energy conference in London, Patrick Pouyanné, the head of the French company TotalEnergies, is on stage gushing about the future of fossil fuels. He goes on and on about Total’s net profits of $36 billion, about expected growth in the oil and natural gas industry at least through the end of the decade and about new discoveries and projects, just as in Namibia. "It is great that in the 21st century, we can still find and exploit such a productive oil field.”

Pouyanné, though, does not see himself as an adversary to the crowd outside the hotel. "We must give the people out there an answer,” he says. His answer is minimizing emissions during the exploitation of fossil fuels, such as the release of methane, which is an even more potent greenhouse gas that is released during oil production and is often simply pumped into the atmosphere. Pouyanné envisions avoiding such emissions in the future. It wouldn’t cost much.

He also says that he would like to accelerate the shift to renewable energies, produce hydrogen and promote the electrification of vehicle traffic. Economic interests, he says, demand as much. Still, he says: "We will continue to rely on oil and gas for quite some time.”

The president of the ongoing World Climate Summit COP28, Sultan Al Jaber, argues similarly. His main job is as CEO of the Abu Dhabi National Oil Company (ADNOC), the second-largest oil company in the world.

“If Britain, Norway and the U.S. got rich with oil production, why are they expecting from Guyana that we leave our oil in the ground and remain poor?”

Arianne Arjoon, environmental activists

"Maximum energy, minimum emissions” is the motto that Al Jaber recites at almost every opportunity. He doesn’t, however, talk much about how that is supposed to work. The emissions-reduction technologies touted so energetically by the fossil fuel sector – such as CCS or filtering CO2 out of the atmosphere – are anything but a comprehensive solution. They wouldn’t even be able to sink current global carbon emissions by 1 percent. And even if the technologies did ultimately become effective for large-scale use, they would require huge amounts of energy – more than the world’s entire current electricity production, according to the IAE.

"In 2023, the industry will invest around $4 billion in CCS,” says Birol. "In order to catch the fossil emissions on a large scale, it would have to spend about 1,000 times as much in the future, around $4,000 billion – every year.”

Instead of investing in changing their business models, some energy companies have shown a preference for changing their communications strategies. "U.S. PR companies, oil and natural gas concerns, the automobile industry and the petrochemical sector have joined forces to develop campaigns and programs centered on sustainability, with the goal of telling the world that the fossil fuel industry is part of the solution,” says Melissa Aronczyk, professor of media sciences at Rutgers University in New Jersey. "Fossil fuel companies have been trying to get involved since the United Nations Framework Convention on Climate Change in 1992.”

Two subway stations down from the European Parliament in Brussels, fossil fuel lobbyists are working to leverage enough space for oil and natural gas in the Green Deal announced by the European Commission. It is the headquarters of the International Association of Oil & Gas Producers in Europe (IOGP). The organization represents all leading Western oil and natural gas companies, from Shell and BP to TotalEnergies.

"Oil and natural gas will continue to play a significant role during the energy transition and beyond,” the IOGP said in a statement. For how long? "Many years,” came the rather hazy response.

Fossil fuels, the IOGP is certain, could ultimately be made climate neutral by sequestering CO2 underground, even if the technology isn’t yet ready. "CCS will be an important technology in the process of decarbonization,” the lobby group said. IOGP believes that the competitiveness of European industry is "seriously endangered” by the energy transition. "We need a more comprehensive approach that doesn’t choose between the climate and industry but tries to achieve both.” It is a message that has gained significant traction among political leaders.

Meanwhile, some large European consumers of energy continue to set their sights on fossil fuels. British Prime Minister Rishi Sunak wants to continue exploiting his country’s offshore deposits for as long as possible and intends to issue more than 100 new licenses while French President Emmanuel Macron has called for a "regulatory pause” in EU environmental laws. Meanwhile, the coalition government in Germany finds itself struggling to find funding for numerous measures aimed at fighting climate change following a ruling by the country’s constitutional court that threw out Berlin’s budget.

The Netherlands election victor, right-wing radical Geert Wilders, has announced his intention to send numerous climate protection treaties and laws "through the shredder” and suspend all state expenditures for climate protection. And he’s not the only one: Right-wing parties from Spain and France to Germany and beyond have realized that campaigning against climate protection laws can be a political winner. In Brussels, Commissioner for Climate Action Frans Timmermans resigned and handed the post over to his Dutch compatriot Wopke Hoekstra, who used to work for Shell.

Guyana, meanwhile, is focusing its efforts almost exclusively on old sources of energy. A natural gas-fired power plant is under construction next to the capital, with the fuel to be delivered by Exxon and the others from the offshore deposits. Oil production also results in a significant amount of natural gas. It will make the country dependent on fossil fuels for decades to come and make it even less likely to turn away from oil mining. There are almost no solar or wind parks in the country – due to a shortage of both investments and infrastructure.

Routledge is pleased: "ExxonMobil intends to be in Guyana for a good 30 years or more into the future."

The oil companies made a great deal with the government of Guyana in 2016. The deal outlining the apportionment of the oil produced guarantees the firms the lion’s share of production. Should there be an oil spill on the high seas, it is unclear who would be responsible. According to current law, the companies involved must only spend up to $2 billion on cleanup.

Nevertheless, ExxonMobil and the others have the country’s best-known environmental activists on their side. Early on, Annette Arjoon, 59, was skeptical of the companies. But today, she an oil industry service provider is supporting her environmental organization. The money allows her to do a lot of good for the local environment and the indigenous population, Arjoon says. "If Great Britain, Norway and the U.S. have become rich with oil production, why do you expect Guyana to leave our oil underground -- and our country to stay poor?"

The owner of the artificial island also doesn’t understand why Guyana should leave its natural resources untouched. Westerners have strange notions, says Nicholas Deygoo. "They claim that they want to become green, but they don’t stop using fossil fuels.”

In the first half of the year, almost two-thirds of Guyana’s oil production was sold to Europe, with much of it landing in Rotterdam.

From the port there, two large pipelines head to the east. To Germany.