Guyana’s oil boom: The world’s newest petrostate plans to combat climate change with oil revenues

In 2015, Exxon Mobil discovered a massive oil reserve off the coast of Guyana.

Now, one of South America's poorest countries has become the fastest-growing economy on Earth.

"It’s speculated that Guyana would become the richest country per capita because of this oil," Kiana Wilburg says.

In a country where almost half of its people live on less than $6 a day, the oil revenues could pull the nation out of poverty.

But at what cost?

Today, On Point: An oil boom has arrived in the South American nation of Guyana. Is it a contradiction that a country threatened by climate change could get rich selling fossil fuels?

Amy Westervelt, investigative journalist. Host of the podcast Drilled, focused on climate accountability.

Melinda Janki, international lawyer based in Georgetown, Guyana.

Esan Hamer, climate scientist and lecturer with the faculty of Earth and Environmental sciences at the University of Guyana.

Kiana Wilburg, energy reporter with Kaieteur News.

Stacy-ann Robinson, associate professor of environmental studies at Colby College.

Part I

PRESIDENT MOHAMED IRFAAN ALI: It is well established that those bearing the brunt of the climate phenomena have made no contribution to the current crisis. Small island, developing and low-lying coastal states like Guyana are among the hardest hit and require adequate financing to address the attendant effects. The commitments by developed world, by the developed countries, including the pledge of U.S. $100 billion per year remain unfulfilled. Guyana is using revenue from oil and gas resources to finance its transition to renewable energy.

MEGHNA CHAKRABARTI: This is On Point, I'm Meghna Chakrabarti. And that was Guyana's President Mohamed Irfaan Ali addressing the UN General Assembly last month. Back in 2015, ExxonMobil discovered a massive oil reserve just offshore the South American nation.

That oil is poised to utterly transform Guyanese life and its economy. A country which is both highly vulnerable to even small perturbations in climate change, while also being one of South America's poorest. For years now, the world's richer economies have said they will help fund climate adaptations for the world's poorer countries.

President Ali called their bluff last month, saying that the funding has not come through. He also didn't hesitate to take those same rich nations to task. For suggesting that Guyana turn its back on developing those oil fields because of how fossil fuels contribute to climate change, Ali soundly rejected that.

PRESIDENT ALI: My country, Guyana is blessed with the best of both worlds, that is the ability to lead on climate change. And the use of our expansive oil and gas reserves to contribute to the advancement and development of our country and region.

CHAKRABARTI: Guyana is set to become the world's newest petrostate, for better or for ill.

So we're going to investigate today how that fact is changing both the country and the world. And I'm joined today by Amy Westervelt. She's an investigative journalist who covers climate accountability. Her podcast is called Drilled, and season eight of Drilled was titled Light, Sweet Crude. It's all about ExxonMobil and the fast-growing oil industry in Guyana.

Amy, welcome to On Point.

AMY WESTERVELT: Hi, thank you. Thanks for having me.

CHAKRABARTI: I should note that today you're joining us from Costa Rica. Closer to the region than I currently am right now.

WESTERVELT: (LAUGHS)

CHAKRABARTI: Can you give us, can we, can you start by giving us the background on exactly when, why, and how that giant oil field in near Guyana was discovered? And put it into context regarding how large it is compared to other oil fields in already, existing petrostates?

WESTERVELT: Yeah, so Exxon has been exploring in Guyana since really the late '90s. They started out in a partnership with Shell, looking for oil, didn't find any for quite a while, and also weren't terribly fussed about it. They were busy in Venezuela and lots of other places in Latin America.

And figured that Guyana's reserves would be reasonably tough to get at because it's pretty deep water offshore there. In 2015, with new partners, they have new partners now, it's Hess Corporation in the U.S. and the Chinese National Offshore Oil Company or CNOOC, they found oil. So they announced that this was a big discovery.

They weren't sure quite how big yet, but they knew it was going to be a big deal. And by 2019, they had shipped their first barrel. And now they are estimating that by 2025, Guyana will be their most productive oil region. So more than the Permian Basin in Texas, which is huge. That is, that's an enormous amount of oil.

It could be up to a quarter or more of Exxon's total output by 2025.

CHAKRABARTI: Wow.

WESTERVELT: That's a lot. Yeah.

CHAKRABARTI: Wow. So it's massive. So I'm seeing here, another way to put it in context, and correct me if I'm wrong, Amy, that could make Guyana the fourth largest producer of offshore oil in the world?

WESTERVELT:  Correct. Yes. Which is enormous.

And it's really incredible how quickly that's happened. Like I said, they just shipped their first barrel in 2019 and already they're already a top producer and are looking to be, yeah. In the top five by 2025, which is, six years after they shipped their first barrel, that's relatively unusual in the industry.

CHAKRABARTI: Okay. So how did you then get interested in this story?

WESTERVELT: To me, actually, that rapid increase was really interesting, because I was like, "Is there a new technology I haven't heard about? How are they doing this? How are they moving that quickly and getting that much volume that quickly?" So I was interested to find out more about that.

And then also I heard about some lawsuits that were being filed against the government invoking all sorts of different things. And I was interested in that litigation as well and how it had come together, and whether it was having an impact on both offshore drilling and how people perceived it in the country.

CHAKRABARTI: Okay. So that litigation, tell me a little bit more about that. Cause it's quite key to what we're going to be discussing today.

WESTERVELT: Yeah, there's a lot of, I think Melinda Janki, who I know you're going to have on today, too, has filed, I want to say it's seven suits now, but she might correct me.

And they are targeting everything from the length of the permits that were granted, which, by law are supposed to be no more than five years, but Exxon had a 20-year permit. To the constitutional right to a healthy environment, which was written into Guyana's constitution quite a while ago with a lot of help from Melinda herself. And there's a suit that is alleging that this project violates that constitutional right.

She also had an insurance related suit, which was pretty interesting. And actually, had an interesting outcome earlier this year, where she went after the government and then the government actually moved to add Exxon as a defendant as well, a codefendant with it, which kind of tells you a little bit about how close their relationship is.

But she was saying that, "Look, Exxon's own environmental impact reports have indicated that if a catastrophic event were to happen offshore. So along the lines of the Deepwater Horizon event, which this drilling is just like, that could potentially impact up to 14 Caribbean countries.

So Guyana could be on the hook for a lot of liability."

CHAKRABARTI: Okay. So you're right. We will have Melinda on a little bit later in the show, and we'll talk more about those specific details with her Amy. But I would love to hear more of what you've uncovered in your reporting. Take me back to what you said a minute ago about how rapid, not only this discovery, but the change that it's bringing to Guyana has occurred.

And you were wondering even like how is that possible?

WESTERVELT: How is that possible?

CHAKRABARTI: So tell me more. So I asked Exxon if there was some new technology and in a lot of other additional words, they roughly said, "No." So the answer is a very friendly government which translates to not very much regulation.

So they've been able to really fast track permitting and drilling. And then they've been able to increase the volume in ways that some people are saying is potentially dangerous. So they've increased the volume past a certain threshold that's listed in their environmental impact reports, which Exxon says is fine and normal.

And a lot of environmental advocates are saying, "No, not so much." The net of that is that, look, you can move a lot faster when you don't have a lot of government regulation. And some people would say that's great. But Guyana was actually supposed to create more of an oversight division.

They even got a World Bank grant to do that. And have not really done that yet. So that kind of leads into this whole fear that, look, we could be looking at another Deepwater, except this time in a country that has relatively little expertise in dealing with something like that.

CHAKRABARTI: So another Deepwater meaning, as you said, I just want to be sure I got this straight, because the oil world is pretty complicated.

WESTERVELT: It's complicated. Yeah.

CHAKRABARTI: Meaning that people are saying there's inadequate oversight even built into the very contract that Guyana has with ExxonMobil.

WESTERVELT: Correct. Yeah. And look, Exxon is a U.S. company. So in the U. S. if they were doing this project there would be someone on board of these offshore vessels, making sure that everything is being done correctly. There would be a certain amount of regulatory hurdles to jump through to make sure that the right safeguards are in place and Exxon has said, "Look, we're a responsible company.

We're taking care of that ourselves."

But there's already been a few issues. There's been some spills. They were also flaring a lot of the gas that was coming up with the whale too. So this is gas, usually comes up with oil when you're drilling offshore. And if you don't have anything to do with that gas, you burn it off, which is called flaring.

And that creates a lot of air pollution and did create a lot of problems for folks on shore in Guyana. They also had a faulty piece of equipment that was operating for quite some time before it was replaced. So there's already been a few of these little indications that like left to their own devices, I'm not sure how tight a ship is being run.

CHAKRABARTI: So in terms of the specificity of what's in the contract between the Guyanese government and Exxon, I will want to return to that because devil's always in the details, Amy. But I just want to quickly touch upon how much this money means for not just the Guyanese economy overall, but for the country's development, because it's about 800,000 people, one of South America's poorest.

As I mentioned earlier, I'm seeing some data here that shows that some 40 plus percent of folks live on $5.50 cents a day. So these billions of dollars of oil revenue is going to change lives in Guyana?

WESTERVELT: That's the idea and that's the promise. So far that's not entirely what's happening for some reason.

And the Guyanese government has not really addressed this as far as I'm aware of. A lot of that money is just sitting in the bank and then can be pulled from whenever the government has a shortfall in the budget. So they have been doing quite a bit of road building and bridge building and things like that.

But as far as Guyanese people themselves getting much out of that. So far, that's not really happening.

Part II

CHAKRABARTI: As I mentioned before, this oil boom brings a fundamental tension into sharp relief. That of climate concerns tomorrow versus economic need today and how both challenges hit harder in developing nations than in more developed countries.

Esan Hamer is a climate scientist and lecturer at the University of Guyana's Faculty of Earth and Environmental Sciences. He says prolonged drought is already plaguing Guyana's agricultural sector. The problem is even worse along the country's coast.

ESAN HAMER: 90% of the population reside along the narrow coastal plain, which is below sea level.

The most imminent threat to Guyanese is the sea level rise.

CHAKRABARTI: Hamer says the seawall that protects the capital Georgetown has been breached by high tides and storm surges several times in recent years. But simultaneously, he's also seen the installation of new infrastructure to help combat the flooding.

HAMER: Over the past five years, the drainage capacity of the capital has been significantly upgraded. We have had the installation of multiple, what we refer to in Guyana as pump stations across the entire country, to drain the floodwaters.

CHAKRABARTI: But people living on Guyana's threatened coastline are the same Guyanese living in one of South America's poorest countries.

As I mentioned earlier, more than 40% of the nation lives on less than $6 per day. Guyana's vice president, Bharrat Jagdeo, says the two cannot be separated. He spoke at an energy industry conference earlier this year, and he took issue with conservation groups and NGOs in the Global North who have called for Guyana to leave its fossil fuel reserves in the ground.

BHARRAT JAGDEO: So we have people to feed. The people of Guyana, they have a legitimate aspiration to a better life, to where our per capita GDP was about $9,000 by the end of this decade, it would be $35,000. But still half of that of the United States of America, we're still not there yet. So we have argued that people have to have a balanced view.

CHAKRABARTI: Climate scientist Esan Hamer says that the complexity reaches into how some revenue from the oil and gas industry is already being used in Guyana. For example, funding those adaptation projects like those new pump stations, along with low emissions energy projects such as hydroelectricity. It's part of what Hamer calls Guyana's low carbon development strategy.

And he doesn't necessarily see it as a problem that this strategy is made possible in part by the sale of fossil fuels.

HAMER: As a climate scientist, of course, being cognizant of the source of global warming. There is some concern. But we need to develop because the economic status of the country is known, so we need to capitalize on the resources, but we need to do so responsibly.

CHAKRABARTI: To do that, Hamer points inland to Guyana's forest covered interior.

HAMER: About 85% of Guyana is pristine rainforest, so we are not a carbon source. We're more of a carbon sink. So this is where the responsibility factor comes in the equation. And I think as long as we explore and extract these resources responsibly, we can play our part, our role in the international endeavor, so to speak, to combat climate change.

CHAKRABARTI: Now, the sense that the global community may demand that Guyana use its newfound resources quote, "responsibly," couldn't that grate with many Guyanese? Responsible for whom? The world and its concerns about climate change, or for the good of its own people? Dr. Stacy-ann Robinson is associate professor of environmental studies at Colby College.

She's researched climate vulnerability and adaptation in Guyana, and she says the country's position of using fossil fuels to aid its own climate adaptation has to be viewed in a historical context.

STACY-ANN ROBINSON: Countries such as Guyana have made this argument where They're saying, "Hey, there are countries in the Global North, the industrialized countries that have almost had a 300, 400-year advantage in terms of being able to progress their development by burning fossil fuels.

The question from governments such as Guyana is, "Okay. Now we found the oil. Why can't we take advantage of this economic prospect?"

CHAKRABARTI: Once again, that was Dr. Stacy-ann Robinson from Colby College. Amy Westervelt, tell me how you think through this real fundamental tension. It's completely understandable that the Guyanese government is saying and has said out loud, "Hey, United States, Europe, even China, you've had yours.

Don't tell us to do, what we should do with ours, especially since we intend to use some of this revenue to actually make us climate resilient."

WESTERVELT: Right? And especially because none of those countries that you just mentioned have ratcheted back their fossil fuel development at all. And look, we're talking about an American company that is profiting from this, right?

So the U.S. in particular really does not have a leg to stand on here. I think that this argument is completely fair, that the expectation should be that high consuming countries and high wealth countries need to reduce their fossil fuel development first. There's no reason that the United States or Europe can really justify launching multiple new fossil fuel developments at this point.

And yet, they all are. That I think absolutely plays into this. The problem, unfortunately, is that, excuse me, the same people who are most adversely impacted by poverty and lack of access to energy are also the people who are going to be impacted first and worst by climate change. So this idea that we have to pick one or the other, it's just not how the world actually works.

I wish it did. I wish we did have more room in the carbon budget and more time to do all these things. But the reality is because of a lot of the companies that are pushing for more of this development themselves, we don't have that time left. We don't have that space in the carbon budget.

So we do have to address both issues at once. And what's concerning about what's happening in Guyana is that they're really not using oil and gas money to transition. They may be using it for some adaptation measures, like the pumps that were mentioned before. And better roads. So people have better evacuation routes.

And at some point, they're going to have to move that 90% of the population that's on the coast, that coast is supposed to be underwater by 2030. So time's ticking on that, and that's expensive. So they may well use oil and gas money for that, but they're also, they just announced recently that they're going to pay Exxon to do this gas to energy project.

That's going to hook the country on fossil gas and make it really not viable to invest in renewables at all. There was a report out this week that showed that if they made the decision instead to try to invest in solar that would have more resilience over time, would create local jobs, all of those things. But instead, they're investing in a project that is more profit for Exxon and ties the country to fossil fuels for longer.

CHAKRABARTI: Okay. I should note that we did reach out to both ExxonMobil and members of Guyana's current government. Neither groups made anyone available to us for an interview. But Amy, hang on here because now's the time I want to bring in Melinda Janki into the conversation.

She's an international lawyer based in Georgetown, Guyana, and as Amy Westervelt mentioned earlier, Melinda was truly instrumental back in 1995 in being sure that Guyana's constitution included an Environmental Protection Act that gives its citizens some of the strongest constitutional environmental protections of any nation, including, quote, "The right to an environment that is not harmful to his or her health or well-being."

Melinda Janki, welcome to On Point.

MELINDA JANKI: Thank you.

CHAKRABARTI: Can you tell me first why you felt it was so important to include those environmental and health protections in the Constitution back in the mid-90s?

JANKI: Actually, there are two separate things here. One is the Environmental Protection Act, which I drafted, and which is really the legislation that is now reigning in the oil industry.

The other is the Constitution, which contains the right to a healthy environment, and that is in the fundamental rights section of the environment, of the constitution, which means that it is enforceable. There's two separate things here. The Environmental Protection Act, the Constitution. In the Constitution, I also wrote a provision which says that the wellbeing of the nation depends on clean air, pure water, rich soils, and the rich biodiversity of plants, ecosystems, and animals.

CHAKRABARTI: Okay. Thank you for that clarification. It's important to know. So then tell me, as Amy Westervelt mentioned, you brought suit against both the Guyanese government and ExxonMobil's included in those suits.

Now, what do you allege that they're doing that violates both of that constitutional right of the Guyanese people and state or national law?

JANKI: I have filed seven separate cases challenging the oil production. These cases are all based on upholding the rule of law. When you oppose oil, people immediately say, "Oh, you're an environmentalist," whatever that means.

The fact is, there is no business case for Guyana to do oil. And so when we hear the positioning of an oil boom, or increase in GDP for Guyana and the removal of poverty. This makes absolutely no sense in the context of Guyana. Guyana is a rich country. It's always had a lot of money. That money has been squandered for decades by governments on both sides of the political divide.

Now, just to get back to --

CHAKRABARTI: Can we just say something real quick? So it's a rich country because of other natural resources that Guyana has. Is that what you're saying?

JANKI: Yes, and because of its people, Guyana has one of the highest brain drains in the world and people leave Guyana because of the politics.

They leave Guyana because the politicians of Guyana, for decades, have sought to divide people and have put forward policies that have mismanaged the economy and impoverished people. People leave for a better life.

CHAKRABARTI: 55% of the population of Guyana lives abroad, I'm seeing here.

JANKI: That doesn't surprise me at all.

CHAKRABARTI: Yeah. One of the highest immigration rates in the world. That's what the data shows, to prove your point. But can you just tell me, for another quick second, before we get back to the oil question. I'm seeing here, in addition to the brain drain, but native sort of natural reserves that Guyana has include large reserves of gold, diamond and bauxite.

I'm presuming a lot of that has actually come out of the ground. How, where has the revenue from that gone?

JANKI: I'm afraid that's a question that you would have to address to the government. Guyana has been producing gold for decades and we don't even have gold reserves. I don't know what's happened to the diamonds.

The bauxite industry has been mismanaged. We also have had extensive fisheries. The fishermen are now complaining that catches are down because of the drilling offshore. As you probably know, deep water drilling is extremely dangerous and a massive polluter. And that is obviously affecting the marine life.

Guyana has these forests. I understand that the previous speaker said something about them being pristine. I just like to point out that these forests have people living in them. They have Amerindian communities. Living in many of these, in quite a lot of the forests, so they're not pristine in the sense of untouched by humans.

These forests are an extremely rich resource in terms of the carbon removal, for example. 154 million tons of carbon every year. I could give you the list of Guyana's wealth, and this is natural wealth I'm talking about, not numbers in a spreadsheet.

The list of Guyana's natural wealth is incredible, but it's being mismanaged.

CHAKRABARTI: So Melinda, let me ask you, in trying to understand why you say there's no business case in Guyana for the development of its oil reserves, by some estimates I'm seeing that by 2040 the oil reserves could generate $157 billion for Guyana.

Why do you say that there's no business case for that when it seems as if, in an ideal situation, and I know that there's a lot riding on that, but that money could be, as one conventionally understands, turned to a sovereign fund, which then would be used to further develop life for people in Guyana.

JANKI: I think, first of all, we have to drop the notion of development. That comes out of the civilizing mission. It's a colonial concept. And what we should be talking about is justice and equality for the people of Guyana.

When you have development, you have the so-called developed world, which has basically brought us to the edge of extinction by its policies, including burning fossil fuels. And you have the developing countries who are supposedly going to catch up with the developed countries. We don't actually want to do that.

We don't want to spend the next 23, 30 years destroying the earth. When I say that there is no business case for oil and gas in Guyana, because the government has been unable to produce one. The fossil fuel industry is an industry in decline. It's a question of when it goes out of business, not if. And the date when it is going to go out of business is getting closer and closer, no sensible businessperson would enter a declining market.

This is a political, not an economic decision.

CHAKRABARTI: Isn't the rationale, though, that to develop this oil, while the oil reserves, while they can, and I'm not taking issue with the assertion that it's a fading industry, right? Because the amount of oil, as far as I understand, is eventually going to go down. But to develop it while they can, would allow Guyana to, if you reject the word development, that's fine, but at least directly and rapidly improve the quality of life for Guyanese.

I'm thinking back to the fact the number that the Guyanese vice president uttered where we had at the clip in the beginning of this segment, where he said that per capita GDP in Guyana was about $9,000, by the end of this decade, he claims it's going to be quadrupled to $36,000.

Who would say no to that? Doesn't that position the country to then eventually turn away from oil and create an economy, a better economy for the 21st century?

JANKI: The point is not a better economy for the 21st century. The point is a better life for the people of Guyana. And those two things are very different.

Using the measure of GDP is not appropriate. It doesn't work.

Part III

CHAKRABARTI: Now, Amy and Melinda, I'm going to come back to you in just a second, but I also want to just take a minute to explore how the oil and gas industry is fundamentally changing Guyana's economy in some obvious ways, which we touched upon, and sometimes not so obvious ways.

Kiana Wilburg is a energy reporter for Kaieteur News. That's the country's largest newspaper. She also reports for Reuters, as well. And Wilburg has discovered the oil and gas industry since the first major discovery. Excuse me, I should say she's covered the oil and gas industry since 2015. And she says the government has greenlit five projects that will produce billions of barrels of oil.

KIANA WILBURG: Those five projects, we're looking at about three to four billion barrels. And of that amount, it's speculated that Guyana would become the richest country per capita, because of this oil.

CHAKRABARTI: Wilburg says there's been a boom in the construction industry, and the country has had to import some skilled labor to keep up with the explosive growth.

That includes hiring foreign truck drivers. And the government is in talks with Cuba to have Cuban nurses staff Guyana's health care industry amid rising demand. But another major change, Wilburg pointed to, was an industry that's not seen growth but decline. Her own: energy journalism.

WILBURG: So you're looking at a sector that started out with having about 15 journalists.

That has now boiled down to about five journalists.

CHAKRABARTI: She says that many, if not most of her former colleagues, reporters who once covered the oil and gas industry, now work for it. Wilburg says companies like Exxon headhunt journalists who could provide unflattering coverage of the industry, and the compensation they get from working at Exxon is often too good to pass up.

WILBURG: Some media houses pay a salary for a journalist that is about 150,000 Guyana dollars to about 200,000. Oil and gas companies are willing to pay half a million dollars. When you throw in the benefits of a car. Other perks like a phone allowance or travel allowance, they have the power to really negotiate on a scale that the local media houses are not able to do.

CHAKRABARTI: Wilburg says she's been offered oil company PR jobs, but has declined so far because she's concerned about what the decline in energy journalism means for her country.

WILBURG: So what it means is the citizens would not have access to information that is critically analyzed, information that is balanced. It's basically PR propaganda.

CHAKRABARTI: That's Kiana Wilburg, reporter for Kaieteur News in Guyana. Amy Westervelt, we could spend hours and hours talking in detail about every little aspect of life that is changing, whether the Guyanese want it to or not, but I wanted to get your take on what Melinda Janki was saying earlier about, she's saying that it's utter folly for Guyana to embrace the oil industry in any way, shape or form because there's just no business case for it in Guyana.

I was wondering what your thoughts are about that.

WESTERVELT: I think one of the things that that really starts to erode the business case and add some context to these big numbers of richest country per capita in the world, and things like this, is that the contract that Exxon has with the government of Guyana is structured such that Exxon profits first, for the first 10 or so years, and then Guyana starts to really realize, it's 50-ish percent of revenue.

So you know, it's similar to if you and I went into business and like you're putting in time and taking other risks. And I'm putting in money and I said, "As soon as we start making money, all of it comes to me for the first 10 years." And also, by the way, I'm not going to be super transparent about what I'm spending, what my expenses are and how I came to them.

And also, I can decide to expand the business and spend whatever I want on that. And then pay myself back. That's roughly the deal that Exxon has with Guyana. And on paper, it looks like this is going to financially benefit Guyanese people. But really, you're looking at possibly some infrastructure projects, possibly some climate adaptation.

Exxon has also invested quite a bit in things like building a new cricket stadium, sponsoring the cricket team, all of these kinds of things. In general, they are things that kind of help with PR and help with social license.

CHAKRABARTI: Yeah. So help me with just a quick comparison, because that 50% of profits that Guyana agreed to with Exxon, how does that compare with other countries?

I'm seeing at least one number here, like Brazil has a 60-plus percent profit agreement.

WESTERVELT: Yeah. First of all, it's really, the whole equation that's used to get to what they call profit oil is quite complicated. So profit oil is what you get after all of the expenses have been deducted.

So we're not talking about like 50% of gross revenue here. We're talking about 50% of whatever is left over after Exxon pays itself back for whatever it decides it's owed. And then there is a royalty paid to Guyana, as well. Their royalty is 3%, which is much less than most other countries get, including other, what they call frontier countries.

Most other less developed countries 5% and 10%. getting 3%. So the estimation right now is that Guyana gets, maybe $8 to $10, up to $12 at the most off of a $100 barrel of oil. But you have to take that also into the context of the global oil market, which if you look 10 years out, which is the point where most analysts are saying, Guyana will really realize benefit from this.

The price of oil is expected to tank in part because of regulations around fossil fuels, and Exxon knows this. Darren Woods himself in a 2017 analyst meeting talked about this and he said, "Guyana is typically a long cycle project that we're trying to turn into a short one, and we're pretty proud of the work that we're doing in that space."

So they know they have a minimal amount of time to capitalize on this. So I'd say the business case for Exxon is great here, but I don't know about for Guyana.

CHAKRABARTI: Okay. So Melinda Janki. I want to get back to the heart of what you are alleging in those suits against Guyana and Exxon, because let's just hypothesize, just for a moment here and say that the contract that Amy has described in detail were actually more advantageous to Guyana, that its percentage of each barrel of oil would be much higher.

It sounds like in that case you would still reject Exxon's presence or even the extraction of oil from Guyanese territory under any circumstances.

JANKI: Meghna, with respect, I think you're muddling up two things.

One is the contract terms, and we all know that this is a disastrous financial deal for Guyana. We also know that Guyana is going to have long term liabilities. For example, the decommissioning. Exxon is taking out the money, and there's no guarantee that they will spend that money. So there are all these Issues around the money, which means that Guyana does not make money out of this deal.

And in fact, there is no such thing as profits, as Amy correctly pointed out. It's called profit oil, and that's an extremely misleading description, because it's just what's left after the oil companies have taken their share. And out of that so called profit oil, Guyana has to pay for all of its costs of doing oil.

The court cases are about illegality. The court cases are about stopping the regulator, the Environmental Protection Agency, and the government from breaking the law. And where there are seven cases, in three of those cases we now have results. We cut ExxonMobil's permits down for more than 20 years to five years.

Because the judge ruled that they were in breach of the regulations. We've just recently had another case in which the judge ruled that the attorney general, they rejected the arguments of Esso, which is Exxon subsidiary in Guyana, the Environmental Protection Agency and the Attorney General.

And the judge ruled that we were correct in saying that they had, that ESSO had not complied with the regulations and that the Environmental Protection Agency had acted illegally when they granted a permit for the so called Gas-to-Energy Project.

Now, just an aside here, that project is financially unsustainable. It's not viable. The government is spending $2 billion on a pipeline and should actually be putting that money into a 100% renewable energy. So there's no business case for this gas to energy project either. It's a vanity project.

The third case I want to tell you about, where we had, we've had a result, was earlier this year when the judge ordered the Environmental Protection Agency to instruct Esso to provide an unlimited parent company guarantee to cover the potential costs of an oil spill. Now that could come from a well blowout, it could come from a tank accident, we know Exxon.

Everybody remembers the Exxon Valdez disaster in Alaska from which the Alaskan environment and people have not recovered. It destroyed people's livelihoods and it destroyed marine life. We all know about the BP Deepwater Horizon explosion, which the rig that exploded, the Macondo well event, which then led to Deepwater, the Deepwater rig Horizon, that cost BP around $70 billion.

Now, the judge said that if there is no parent company guarantee in place, Guyana is potentially liable. In 2022, ExxonMobil said they earned $56 billion. Guyana's budget for 2023 is $3.7 billion U.S. dollars, and the government is boasting that this is the biggest budget ever. Now, if there is an oil spill and God forbid that there is an oil spill, but the regulator is not doing its job and the risks are increasing, Guyana is in no position whatsoever to put up the money to deal with an oil spill.

And I may as well flag here that actually oil companies don't actually remove the oil from the ocean. It just sinks, because nobody's really got the technology to do it. It just disappears and people think it's been cleaned up. We have filed an in court, an affidavit saying the potential harm to Guyana's economy cannot be overstated.

Liability for cleanup, restoration, compensation, following an oil spill, etc. from ESSO's operations is unlimited and uncapped, and could run into billions of U.S. dollars, far exceeding what is in the Natural Resource Fund, and Guyana's biggest annual budget, even combined.

CHAKRABARTI: Okay, no, I actually appreciate all of those details and corrections Melinda, don't get me wrong, I do appreciate them. But similar, I'm just trying to get at something deeper. Are you satisfied with those rulings? Because they still, though perhaps restricted or diminished, leave the oil and gas industry in place in Guyana.

JANKI: There are another four cases. We've had two decisions now from the Chief Justice, one in which she took a year to give a decision and ruled against us. That is on appeal. One in which she took a year and five months to rule against us in which basically the decision was that flaring billions of cubic feet of gas is not an adverse impact on the environment. That will also be appealed.

I think when you ask me this question, there are two different things here. My own view as an individual and as someone who has worked in the oil industry is that for Guyana to do oil and gas now is economically unwise, and that the government has not produced a business case to convince anybody.

When you ask me about the court cases, that is a different thing. In the court cases, I represent concerned citizens of Guyana and these are all individuals. These are not NGOs. And by the way, I have to say that I agree with the vice president's statement that northern NGOs have no business telling Guyana what to do.

The court cases are brought by citizens who are concerned about the illegalities in the oil and gas sector. And it's the obligation of citizens to go to court to stop abuses of power by the government. And that is exactly what these citizens are doing. And in fact, in one of the court cases, the judge quoted Justice Bhagwati from India, who said that but for the vigilance of citizens, democracy would perish.

CHAKRABARTI: Yeah. Perhaps it's my own rudimentary, and I admit, I'm looking at what's happening in Guyana from a distance, right? I will fully acknowledge that. But fundamentally, I keep getting stuck at this question of, "What should a nation be asked to do?"

When it is suddenly revealed to it that it has this huge -- I'm going to still assert that it's a potential economic resource, a complex one, regarding fossil fuels, that it could use for the benefit of its people, whether Guyana is doing that or not right now. Clearly, both of you have brought a lot of evidence that the government is probably not. But, should a nation like that turn its back on that resource, Melinda?

JANKI: Of course, it should, because this is not benefiting Guyana, this is benefiting ExxonMobil. Guyana is going to end up with massive bills, it's already ending up with massive bills. And the clean-up for this, the shutting down of those wells, that bill could end up with Guyana as well. This is not a long-term industry, so what you're looking at is stranded assets.

You have to be realistic. The fossil fuel industry right now cannot survive. It has to be subsidized, and the Global North government subsidized fossil fuels last year to the tune of $7.1 trillion. That's not my figure. That comes from the International Monetary Fund. Now that's American taxpayers' dollars going in to subsidize the fossil fuel industry.

British taxpayers, European taxpayers. The industry is simply not viable.