When Sir Walter Raleigh sought the mythical City of Gold in Guiana in 1595, he could hardly have envisioned that his quest would eventually lead to a different kind of treasure: offshore oil. Today, Guyana has emerged as the new El Dorado of the oil industry.

The impact of Guyana’s oil boom is remarkable. Since the first oil extraction in 2019, the country’s economy has surged by 53 percent annually, making it the fastest-growing economy in the Commonwealth. Current oil production averages 600,000 barrels per day, with projections to hit one million barrels daily by 2027. This equates to more than one barrel of oil per person per day. Estimated reserves in the Stabroek field stand at 11 billion barrels, though this figure is likely conservative.

The discovery has attracted global interest. Oil licenses have been issued, and significant reserves are also believed to exist offshore Suriname, potentially up to 25 billion barrels. This has drawn international companies and countries, including Commonwealth petro-states like Trinidad, Ghana, and Nigeria, eager to participate in the boom.

Guyana’s oil, particularly its sweet Brent crude, is highly profitable due to its low cost—less than half the global market price—and a high success rate in drilling. The Stabroek field boasts a 90 percent success rate for new wells, significantly higher than the global average of 20 percent.

The primary beneficiaries of Guyana’s oil wealth are major investing companies, including American firms Exxon Mobil and Hess (with Chevron bidding for a takeover), and China National Oil Corporation. However, Guyana’s financial benefits are limited by a 2016 production-sharing agreement, which includes only a 2 percent royalty rate and 50 percent of net profits after costs. This has raised concerns about long-term financial gains for the nation, with current revenue flowing into a sovereign wealth fund used for infrastructure.

The upcoming Venezuelan election in July 2024 could further complicate the situation. Venezuelan President Nicolás Maduro, known for his authoritarian rule, is pursuing a long-standing claim to part of Guyana, including its major oilfield. Despite Venezuela’s substantial oil reserves, international sanctions have crippled its ability to sell oil, leading to economic hardship.

Guyana enjoys support from international allies, including the USA, UK, and France, which have provided military and diplomatic backing. This support is crucial as tensions with Venezuela continue.

Guyana is using its oil wealth to modernize and industrialize, aiming to reclaim its role as the “breadbasket of the Caribbean” and ensure regional food security. As Guyana thrives as an oil-rich nation, the Commonwealth and its allies must remain vigilant and supportive in the face of potential threats from Venezuela.