Imagine a country smaller than the state of Idaho, with fewer than a million people, suddenly finding itself sitting on one of the biggest oil bonanzas of the century. Almost overnight, its economy explodes, catapulting it into the ranks of the world’s wealthiest nations per person. Sounds like a dream come true, right? But anyone who’s watched the history of resource-rich countries knows there’s often a dark side to this kind of windfall. That’s the story unfolding right now in Guyana, and it’s got a lot of people wondering: will this tiny nation dodge the infamous “oil curse,” or is it already on a collision course with it?
Guyana’s Astonishing Rise from Rags to Riches
Just a decade ago, Guyana was scraping by as one of South America’s poorest countries. Fast forward to today, and it’s projected to rank among the top ten wealthiest nations when measured by GDP per capita using purchasing power parity. How did this happen? It all started with a series of massive offshore oil discoveries in the Stabroek Block, a huge area in the Atlantic Ocean off its coast.
Production kicked off in late 2019, and since then, the numbers have been jaw-dropping. The economy has seen growth rates that make other countries look like they’re standing still—over 60% in one year, then high double digits in the years that followed. Today, Guyana pumps close to 900,000 barrels of crude per day, making it the third-largest oil producer in South America, behind only giants like Brazil and Venezuela.
In my view, what’s really striking is how quickly this transformation happened. Most oil booms take decades to mature, but Guyana went from first major find to near-million-barrel production in record time. It’s the kind of story that grabs headlines and sparks envy across the region.
What’s Driving the Boom?
The heart of it all is the Stabroek Block, estimated to hold at least 11 billion barrels of recoverable oil. An international consortium led by a major U.S. oil company has been developing it at breakneck speed. Several floating production vessels are already online, with more on the way.
Looking ahead, three additional projects are slated to start between 2026 and 2029, adding hundreds of thousands of barrels daily. There’s even talk of a natural gas and condensate facility that could push total hydrocarbon output well over 1.7 million barrels per day equivalent by the early 2030s. If everything goes according to plan, Guyana’s GDP could more than double in the next five years.
- Current production: around 900,000 barrels per day
- Upcoming additions: up to 650,000 barrels from new projects
- Potential future gas facility: another 290,000 barrels of condensate equivalent
- Projected peak: over 1.7 million barrels per day
These aren’t just abstract numbers. They’re transforming government budgets, funding ambitious infrastructure plans, and putting Guyana on the global energy map in a big way.
The Numbers Tell an Incredible Story
Let’s put it in perspective. According to international forecasts, Guyana’s purchasing power parity GDP is expected to hit around $75 billion in 2025, up from barely $10 billion just before oil started flowing. By 2030, that could climb past $150 billion. For a population under one million, that translates to per capita figures that would make it one of the richest places on earth—potentially second only to tiny Liechtenstein.
It’s easy to get caught up in the excitement of those statistics. I’ve followed plenty of resource booms over the years, and this one stands out for its sheer velocity. But impressive growth rates don’t automatically mean sustainable prosperity.
Resource wealth can be a blessing or a curse—it’s all about how it’s managed.
– Common observation among development economists
What Exactly Is the “Oil Curse”?
The term “resource curse” or “oil curse” describes a paradox that’s played out in country after country. Nations blessed with abundant natural resources, especially oil, often end up with slower economic growth, higher corruption, greater inequality, and even political instability compared to resource-poor peers.
Why does this happen? There are a few main reasons:
- Over-dependence on a single volatile commodity makes the economy vulnerable to price swings
- Oil revenues flood government coffers, reducing incentives for building strong institutions or diversifying
- Easy money can fuel corruption and rent-seeking behavior
- Wealth concentration often leaves ordinary citizens behind
- Currency appreciation hurts other export sectors (known as Dutch disease)
Some countries have managed to avoid the worst effects—think Norway with its sovereign wealth fund and transparent governance. Others haven’t been so fortunate. The question for Guyana is which path it will follow.
Signs of Trouble Already Emerging
Even amid the boom, there are worrying indicators. Despite explosive GDP growth, poverty remains widespread. Estimates suggest nearly half the population—or possibly more—still lives below the poverty line. Rural communities, in particular, report that little of the new wealth has reached them.
The government has launched an ambitious spending spree on roads, bridges, hospitals, and ports. That’s understandable—you need infrastructure to support growth. But critics worry about transparency and whether contracts are going to well-connected insiders rather than delivering maximum public benefit.
Another red flag is the production-sharing agreement with the operating consortium. Many analysts consider the terms heavily tilted in favor of the companies, meaning Guyana captures less revenue than it might have with tougher negotiations. When oil prices fall, that imbalance becomes even more painful.
The Geopolitical Shadow Hanging Over Everything
Perhaps the most dangerous wildcard is the long-running territorial dispute with neighboring Venezuela. The Stabroek Block lies in waters that Venezuela claims as part of the Essequibo region—a vast area making up two-thirds of Guyana’s land territory.
Tensions have escalated sharply since the oil discoveries. Caracas has stepped up rhetoric, issued maps showing Essequibo as Venezuelan, and even sent naval vessels into the offshore development area. Border incidents have become more frequent.
For Guyana, this isn’t just posturing. An actual conflict would devastate the investment climate and halt oil development. It’s a reminder that resource wealth can attract predators as much as prosperity.
Global Oil Markets Aren’t Helping
Timing matters, and Guyana’s boom coincides with a softening outlook for crude prices. Brent has already dropped significantly over the past year, and some forecasts see it potentially falling into the $30s by later this decade as supply outstrips demand.
Ironically, Guyana itself is contributing to that oversupply through its rapid production growth. As non-OPEC output surges, prices suffer, and lower prices mean lower government revenues—just when spending commitments are ramping up.
- Rising supply from Guyana and other new producers
- Slowing demand growth in a transitioning energy world
- Potential for sharp revenue drops if prices crash
When budgets are built assuming high oil prices, a downturn can force painful adjustments or encourage desperate measures.
Can Guyana Chart a Different Course?
It’s not all doom and gloom. Guyana has some advantages that other cursed nations lacked at similar stages. The government has established a sovereign wealth fund to save portions of oil revenue rather than spend everything immediately. International partners bring technical expertise, and global attention might help keep governance in check.
Steps like investing heavily in education, healthcare, and diversification could pay big dividends. Some observers point to early moves toward gas utilization and renewable energy as positive signs.
Still, building strong institutions takes time, political will, and resistance to short-term temptations. History suggests the window for getting it right is narrow—once entrenched interests form around oil rents, reform becomes much harder.
Lessons from Around the World
Other countries offer both warnings and potential blueprints. Norway saved aggressively, invested transparently, and maintained democratic accountability. Botswana turned diamond wealth into sustained development through prudent management. On the flip side, nations across Africa and Latin America show how quickly things can go wrong when governance falters.
The most interesting aspect, to me, is how often the difference comes down to decisions made in the early years of the boom. Guyana is still in that crucial phase.
What the Future Might Hold
If Guyana strengthens institutions, saves wisely, and spreads benefits broadly, it could become a rare success story—a small nation that used oil wealth as a springboard to genuine, lasting prosperity. But if dependence deepens without corresponding reforms, the familiar pattern of inequality, corruption, and eventual crisis could emerge.
Add in the geopolitical risks, and the stakes feel even higher. The next few years will be telling. Will leaders prioritize long-term stability over short-term gains? Will the international community help rather than simply extract?
One thing’s for sure: Guyana’s journey is worth watching closely. It could either reinforce the gloomy narrative of the resource curse or offer hope that, with the right choices, even the biggest windfalls can be managed responsibly. In a world hungry for energy but wary of its costs, few stories matter more right now.
Whatever happens, this small country’s experiment with sudden oil riches will teach lessons far beyond its borders. The question isn’t whether challenges will come—they already have. It’s whether Guyana has the wisdom and resolve to meet them head-on.
