Guyana borders Brazil, Suriname and Venezuela. The country is about the same size as England and Scotland combined, with a population of less than 800,000. Tropical rainforest covers most of the country. Guyana enjoys an enormous biodiversity, with savannas, swamps, mangrove forests, wetlands and lots of tropical rainforest. Because of all that greenery, Guyana was long considered a ‘carbon sink’, a place that absorbs more CO2 from the atmosphere than that it releases.

But all that is changing rapidly. In 2015, ExxonMobil discovered oil off the coast of Guyana, with estimated reserves of 11 billion barrels of oil.

This discovery has given Guyana, once one of the poorest countries in South America, the fastest-growing economy in the world. The country’s president is therefore in a hurry: he wants to contract out the oil reserves as soon as possible, before more stringent climate measures destroy any chances of a sale, and before demand for oil decreases.

Of course there is a downside: Guyana’s government has little experience with this type of outsourcing, rather convenient for ExxonMobil. This carries major implications for the climate crisis and also for the economic inequality in the country. Moreover, there are huge risks for the local population and marine life.

What role does ING play?

ING is directly involved in oil and gas production in Guyana: in 2021, they provided financing to the company SBM Offshore to build a production platform off the coast of Guyana (an FPSO, ‘Floating Production Storage and Offloading’). Essentially this is a large floating factory, which produces, processes, and stores oil and gas from crude before transportation. The oil and gas produced through the platform are pumped into oil tankers or are transported via pipeline back to shore for distribution.

Additionally ING finances Tullow Oil, one of the oil companies besides ExxonMobil pumping oil and gas in Guyana. ING benefits from the profits these companies make – at the expense of Guyana and its people.

What is an FPSO? Source: WikiCommons

Oil spill

Experts and activists are deeply concerned about a possible oil spill. One of them is Robert Bea, a prominent engineer. He investigated the 2010 Deepwater Horizon disaster, the largest offshore oil leak in history. Back then, more than 600 million liters of oil spilled into the sea and it took 87 days to plug the leak. Now Robert Bea and others fear that ExxonMobil in Guyana has failed to take important safety measures to prevent and stop an oil leak. “I am far from reassured,” he told The Guardian. “And they [ExxonMobil and the Guyanese government] should also be worried.”

ExxonMobil struck a very favorable deal with the Government of Guyana, because in the event of an oil spill, ExxonMobil will pay for only a small portion of the costs, a maximum of US $2 billion. Guyana must bear the remainder of the costs. By comparison, the total cost of the Deepwater Horizon disaster ran around $71 billion.

The impact of an oil spill

The consequences of an oil spill will be disastrous. Not only for nature – the livelihoods of local communities would also come under pressure.

The drilling is taking place in the Amazon-Orinoco zone. This is an area of especially significant ecological and biological importance. Not only because of its very rich marine life, with rare and endangered species, but also for the local and indigenous population. They are largely dependent on fishing.

Unequal distribution of revenues

Besides the concerns for a potential disaster, there are ongoing concerns about the distribution of oil revenues. The government of Guyana has struck a pretty bad deal with ExxonMobil. The revenues from the oil reserves for the country have been negotiated at a lower rate than similar deals in other countries. Furthermore, the population does not benefit equally from the wealth, increasing inequality. In other developing countries where fossil fuels have been found, this has eventually led to a weaker economy and weaker democracy. For example, this happened in neighboring Venezuela.

The prices of everyday food in Guyana have skyrocketed, and working class people increasingly struggling to make ends meet. An article from NRC Handelsblad earlier this year featured two people:

“There is growth, especially if you look at the absolute per capita figures. GDP per capita has gone up, Guyanese are making more money than before. Say, a decade ago, it was around US $11,000 a year, now it runs up to 60,000 dollars,” says economist Thomas Singh. “But inequality in our country is also increasing. People working in the private sector are often benefiting from the petrodollars, but not everyone,” he says. “Many miss the money boat.”

For saleswoman Sharon Rodeel, who has children and grandchildren, it is becoming increasingly difficult to make ends meet. “Everything is expensive. Prices are increasing with enormous speed. I have to have two jobs. I cannot live from my food stall money alone, so I do cleaning work at a school as well,” she says.

90% of Guyana’s population lives below sea level

Pumping up this huge amount of oil turns Guyana from a ‘carbon sink’ to a ‘carbon bomb’: an oil or gas project that emits at least a billion tonnes of CO2 over its lifetime. In doing so, the project will contribute hugely to atmospheric warming.

The heartbreaking part of this story is that Guyana itself is extremely vulnerable to the effects of climate change. 90% of Guyana’s population lives along the Atlantic coast, which in some places is as much as two meters below sea level. Higher sea levels due to the climate crisis pose a great threat to Guyana and its people.

Part of Guyana’s coastline is protected by an ancient, 450-km long structure that blocks sea water. Ironically, this was built by the Dutch during colonial times. In some places, salt water is already flooding the barriers. Floods are not the only problem; the salt water pollutes surface water and groundwater. And this in turn creates difficulties for agriculture, on which part of the population is dependent.

Back in the 1990s, people were advised to move more inland. But this hardly ever happens, because people do not want to leave their homes.

Local resistance

Fortunately, there is resistance to the oil extraction operations. In 2021, two residents of Guyana took ExxonMobil to court: Troy Thomas, a lecturer at the University of Guyana, and Quadad de Freitas, a tourist guide from the Rupununi region in the interior of Guyana.

They argued that offshore oil extraction by ExxonMobil threatens the right of Guyanese to a clean environment and violates international agreements to combat climate change, which were also signed by Guyana.

Last year, at ExxonMobil’s shareholders’ meeting, Alexis Stevens presented a proposal. She did this on behalf of Mercy Investment Services, a professional investor that uses its money exclusively to positively impact environmental and human rights. Her contention in that shareholder meeting was that ExxonMobil is insufficiently prepared for the risk of a major oil spill. She asked for shareholder support to have ExxonMobil conduct a more thorough investigation. ExxonMobil’s CEO counterargued that the company had done enough research, after which the proposal unfortunately did not receive enough votes.

At that same shareholders’ meeting, Melinda Janki, speaking on behalf of a group of shareholders with a 9% stake, demanded a halt to offshore oil extraction. After all, when all that oil is consumed, it will lead to even more of a sea level rise. That is a serious threat to Guyana itself.

Investor advocacy group As You Sow criticized ExxonMobil’s plans in Guyana: “Exxon’s activities in Guyana pose serious material risks to the company from an economic, legal, and human rights perspective,” Andrew Behar, CEO of As You Sow, argued. “We believe it is a fundamentally flawed mission that must be stopped.”

🖋 Written by Ivonne Schippers
🔍‍ Researched by Boris Minnaert

What can you do?

Oil extraction in Guyana can only continue if enough banks financing the venture can be found. Since ING is involved in this project as a Dutch bank, it is important that as many people as possible in the Netherlands know what is happening in Guyana.

Share this article and our video (in Dutch) on your Instagram, tag ING and call on the bank to stop financing fossil fuels!