Guyana’s Oil: Chinese ‘New Partner’ – OpEd
China’s move in many regions is not only in the Middle East, but also in Latin America, especially in Guyana. Guyana is a tiny country located near Brazil. The name of Guyana is unpopular for several scholars rather than Argentina, Chile, Brazil, Venezuela, etc. due to the lack of sources and research.
The Chinese government, however, seeks lucrative opportunities in order to achieve its economic interest. To celebrate their 50th year relationship on June 20 , China and Beijing held a meeting to talk about their prospect of cooperation in various fields in the future. President of Guyana, Irfaan Ali said that cooperating with Beijing is beneficial for the economy due to the Chinese investment and aid. President Xi also replies that in order to have a win-win solution, China puts immense trust in Guyana.
In 2015, Guyana was talked about by many scholars. In early years, ExxonMobil, a multi-national company centered in the US, found oil. It was a long term finding since ExxonMobil initiated exploration in Guyana in 2008, collecting and evaluating substantial 3-D seismic data that led to the company safely drilling its first exploration well in 2015, Liza-1. Furthermore, the oil has made Guyana the world’s fastest-growing oil. The Reuters estimates Guyana could hold 25 billion barrels and produce 1.64 million bpd by the end of the decade. The report by the International Monetary Fund (IMF) predicts that Guyana’s economy could grow 47% and produce 800.000 barrels per day in 2025.
This fact is realized by the Chinese government how prominent Guyana is. Therefore, the government invests there to contribute to drilling oil.
Trade and Projects
Like other regions and countries, China has offered projects to Guyana. This initiative called Belt and Road Initiative (BRI) was introduced by President Xi in 2013 in Kazakhstan.
Many researchers such as Evan Ellis wrote in Global America were highlighting the Chinese projects in Guyana. For instance Amaila Falls. In there, Guyana believes that the China Railway Group Limited, the Chinese company, constructed the hydropower. It will supply to Guyana Power and Light (GPL). The following projects also included mend roads connecting the coast at Georgetown, the capital city of Guyana, and Berbice to the Linden. The government has also advanced a smart cities surveillance initiative with the Chinese contractor Huawei, after the APNU-AFC created an initial plan.
The latest project, the Guyana government agreed that China will lead and assist in the construction of the new crossing over the Demerara River. The project cost US$260 million.
In its development, the trade value between both countries in 2021 grew rapidly, reaching US$710 million compared to US$500 million in the previous year. The China’s Ambassador to Guyana said vividly that “China and Guyana have become each other’s important trading partner.”
Energy Interest
The increase of positive trend of trade is followed by the commitment by the Chinese government to be involved in Guyana’s oil. In 2020, Chinese represented by the China National Offshore Oil Corporation (CNOOC) had 25 percent stake in the Stabroek oil field. The company would cooperate with ExxonMobil and Hess Corp.
This year, the Guyana government invites China to bid for the oil blocks. The bid round for 14 new oil blocks was launched last December and is expected to close by April. Guyana’s government hopes to award contracts by the end of May 2023. The oil blocks on auction are for shallow and deep-water areas.
This is a chance for China to reduce its dependence on the Middle East’s oil. China should diversify its oil income from Guyana. Michal Meidan, the Director of China Energy, estimates that China’s state owned oil majors expect demand for transport fuels to peak in 2025 at around 14.6 mb/d. Although China has still faced Covid-19 outbreak and struggled hard for economic recovery, oil is important for China’s needs. Due to a rapid urbanization and a rising middle class, oil use will continue to increase. In addition, in other years, China is still one of the largest oil importing countries in the world.
China should take the offer from the Guyana government. In order to assist Guyana’s economy, China is being seeked as an “angle” for a developing country in line with the Chinese slogan “Chinese Dream”. It will create a clear image of China and curb debt-trap diplomacy created by the Western media.
