How Exxon Captured a Country Without Firing a Shot

Could Guyana’s Exxon ruling scare big oil off risky exploration?

Guyana High Court: EPA and ExxonMobil Put Country At Grave Risk

[00:00:07] We interrupt this program to bring you a breaking news story.

[00:00:11] U.S. oil giant Exxon strikes oil in Guyana. Now, one of the prominent election issues in Guyana has been the country's oil exploration efforts.

[00:00:20] There were rumors swirling that Guyana had found oil.

[00:00:26] Unlike almost all its neighbors, Guyana is not yet an oil producer, but last week, ExxonMobil announced it had discovered oil off the coast.

[00:00:38] In May 2015, ExxonMobil announced that it had struck oil off the coast of the small South American country of Guyana. And in Guyana. This was a big deal. And then just a couple of months later, Exxon was making headlines for another reason entirely.

[00:00:58] An investigation is underway into ExxonMobil. The huge oil company buried research about the effects of climate change. Reports suggest more than 30 years ago, Exxon's own scientists were taking climate change projections into account in its operational plans.

[00:01:14] Exxon was on the cutting edge of science. They wanted to be on the cutting edge of science 40 years ago on climate change.

[00:01:20] Journalists at InsideClimate News, the L.A. Times and Columbia Journalism School published dozens of internal documents that showed that ExxonMobil had been warned by its own scientists about climate change back in the 1970s and yet had worked hard to keep the world from ever hearing those warnings or taking them seriously. Exxon rushed to defend its record, criticized the jouralists. It ran tons of social media ads and videos that would pop up every time you searched Exxon climate on Google. It claimed the whole story was part of an organized plot against it, But it was hard to deny the hundreds of internal documents that the company itself had put in its corporate archive at the University of Texas Library. It was all there in black and white: predictions of warming temperatures, rising seas, fires and hurricanes, models and charts that showed exactly what we're dealing with today. Story after story painted Exxon as the world's climate villain.

[00:02:28] And it was at this moment, Guyana, a country on the frontlines of the global climate crisis and one of the few South American nations to stay out of oil throughout its history emerged as a new oil state. Thanks to Exxon. As time went on, Exxon began projecting that oil from Guyana would make up around 25% of its total global output. So to recap, the same year Exxon was exposed for blocking climate policy for decades, they decided to start a whole new project doing offshore drilling in Guyana, a project so large that it's what climate experts call a carbon bomb. Knowing everything they know about climate change and the role fossil fuels play in it, knowing the inevitability of oil spills and flaring and things going wrong. Not in the 1970s when they were just learning about these things. But now, when they know so much, that's when they decided to expand into Guyana.

[00:03:35] One of the first things they found was who was this company that found this oil? And they said, Oh, it was FPGA, Esso Exploration and Production Ghana Ltd. And that company is a subsidiary of Exxon Mobil Corp..

[00:03:54] Kiana Wilberg reports on the oil and gas industry for one of the country's top papers, Kaieteur News.

[00:04:00] And so I said, okay, we need to let people know, yes, we found oil, but who are we really dealing with? Who is this company? What's this track record? We don't know anything about it. Let's get into it.

[00:04:22] I'm Amy Westervelt. And I'm a journalist who's been covering the fossil fuel industry for 20 years. So it was a big surprise to me that Kiana and her colleagues had not heard of ExxonMobil before this. In the U.S., of course, they're a household name. But for journalists in particular, they have a reputation. For me and every journalist I know who's ever done an Exxon story, weird shit just happens when you're reporting on this company. When I was interviewing those former Exxon scientists I mentioned before, the ones that had done all that climate research back in the seventies and eighties, every time I traveled, half my reservations would somehow end up changed or canceled. It actually happened when I was reporting on this story, too. On my way to Guyana. I got a message just before my flight that my hotel room in Georgetown had been canceled. I called our senior producer and editor Sarah Ventre about it to let her know.

[00:05:18] Good morning, Sarah. I woke up to a little surprise that Marriott had canceled my hotel reservation tonight. I totally forgot that. Like, every time I go somewhere to report on Exxon, this happens.

[00:05:38] We asked Kiana if intimidation from either the oil companies or the government ever makes her think twice about her beat.

[00:05:46] Absolutely. Absolutely. I remember watching this documentary about how citizens of Papua New Guinea died when they were pushing for oil and gas project in a particular area. People who were protesting against it started disappearing. But I am I'm very, very much aware of the dangers of reporting on the oil and gas sector.

[00:06:19] Those dangers have only increased in the few years since Guyana became an oil country.

[00:06:24] For decades now, the fossil fuel industry story has been that oil equals development and prosperity, equality, stability, a better quality of life. As the world's fossil fuel companies raced to tap the last of the planet's oil reserves. We have a chance to examine that promise up close in real time this season. Life and death in the world's fastest growing economy.

[00:06:53] The purpose of an oil company is to make money. They have no other purpose.

[00:06:58] If you have abundant natural resources and you can use those natural resources in a very responsible manner to help lift your people out of poverty, that's what I support.

[00:07:11] But it's really extraordinary the leverage that the industry has over the country, and it's inexplicable.

[00:07:19] The amount the number of of attacks we have received from members of the government. It shows that the government is not ready to accommodate persons who are willing to speak out.

[00:07:35] 1.2 billion gallons of sewage an hour for an ocean. So beginning roughly a gallon, the ships for every barrel of oil they take out. That's the deal in a nutshell.

[00:07:48] I thought it was hard to report on the CIA, and I came to understand that Exxon was far more difficult and a little bit scarier even.

[00:08:00] Welcome to Light Sweet Crude, a special crossover season of Drilled and Damages. Stay with us.

[00:08:14] My lifelong dream since since growing up was to be a teacher.

[00:08:19] This is Kiana Wilburg, who we heard from before. She was one of my first connections in Guyana, actually. I originally hired her to help do some interviews and some on the ground recording when we couldn't travel to Guyana because of COVID. But the more I got to know her, I realized that she wasn't just helping us to tell the story. She was a big part of it.

[00:08:40] And I didn't get to fulfill that dream because I was told that I was too young and the boys in the class would not take me seriously as a teacher. So I said, okay, what's the next thing that I wanted to do? And that would be writing. I love to write and I love to pray as well. So I remember praying and I said, You know, God, if you channel me in that direction to get a job that allows me to do what I love, that allows me to write, I'm going to give 1,000% of myself every single day. The next day I got this job.

[00:09:34] This job was working as a reporter at one of the country's largest newspapers, Cater News. She was young, 19, maybe 20, and she had no idea what to expect. She stayed up all night before her first day studying the paper and its writers.

[00:09:51] So I had a little notebook and I wrote down all of the topics that they paid attention to and helped in crime and education, because I wasn't sure where they would put me or what they would ask me.

[00:10:03] She even picked out the perfect first day of work outfit, just like you used to do the night before your first day of school.

[00:10:13] I remember having this black jacket with gold buttons and a matching green, green inner top and a black pants with green shoes. And when I got to where I thought that I looked so good.

[00:10:32] But it turned into one of her first lessons about navigating Guyana's fraught political landscape. As a journalist.

[00:10:41] I got to work diversity, and I was reprimanded for it because green and black are party colors. It's the colors of one of the major political parties in the country. If you go out there as a reporter, they automatically ask you, Oh, are you a representative of this party?

[00:11:02] That's a big deal in Guyana, where politics are tense and racialized.

[00:11:08] You have predominantly blacks and you have predominantly Indians and their parties to represent those interests. Leading up to elections, you will see both sides reminding of things that happened five years ago, ten years ago. 50 years ago. You you will hear them beating these racist drums. EV Like every single time is leading up to elections. And so unfortunately, even at this media entity, when it gets to that time, you see some people see good afternoon and some people.

[00:11:54] According to Kiana, oil drilling has exacerbated the problem.

[00:11:58] It's more cutthroat. And there's no apology there. There is no apology for it. There is no care for window dressing anymore. It's going to be vile. It's going to be disrespectful. It's it's oil is just making this the politics. It's getting toxic. It's it's reaching an extremely toxic level.

[00:12:24] That's pretty concerning in a country with a history of political battles turning violent. The fact that politics are turning ugly in the wake of oil doesn't exactly bode well for stability in Guyana. Americans are, of course, no strangers to divisive, toxic, racialized or even violent politics either. But to give you just one example of just how bad it's starting to get in Guyana, Guyana told us about a fight over one piece of oil related legislation that actually ended up in a wrestling match. Seriously, some politicians ended up rolling around on the floor of the National Assembly.

[00:13:02] And so we are witnessing now unprecedented vulgarity.

news archival - National Assembly, Guyana 

[00:13:06] In the National Assembly of Guyana...

[00:13:07] The opposition resorted to whistling, stealing the mace and that instrument. If it's removed from there, you cannot pass a law.

[00:13:20] So  the opposition tried to steal the mace so that they can't pass it. And it was a tug of war between the members of the opposition and their parliamentary officials and their images on line with a parliamentary official lying on the ground, hugging the way so that this cannot be stolen from him.

[00:13:51] That sort of thing has been happening more and more in the past couple of years as Exxon started actually producing barrels of oil. Suddenly the potential for oil profit to become real money in government accounts. Roads are being built. Government programs are being announced as capital, Georgetown. It's an oil boomtown now that caters to foreigners in the oil business. There are highrise hotels springing up all over the place. It's impossible to get a reservation. At the most popular restaurant in town. Old colonial homes near the waterfront have been torn down and replaced by modern apartment buildings or condos where oil execs from Houston rotate in and out. Competition for power and wealth has intensified, turning up the heat on long simmering political, ethnic and class resentments. When that first announcement was made in 2015, it was just the earliest hint of what was to come. Exxon had figured out that there was oil off Guyana's coast, but it needed to understand exactly how much and how accessible it was. Once that was determined, it had to commission unusually large and complex offshore rigs to get at the oil. These were not your standard offshore platforms. Exxon needed to be able not only to drill in extremely deep water, but also to store large quantities of oil at sea and ship barrels directly from the middle of the ocean. It takes at least two years to build these things. They're called floating production, storage and offloading vessels. Or as we heard, a lot of people call them FPSOs. They cost up to $3 billion each and they can take up to a year just to install and get going. So it makes sense that while Exxon announced that it had discovered oil in Guyana in 2015, it didn't actually produce its first barrel there until 2019. When that happened, the country's president at the time, David Granger, was so thrilled. He declared the day a national holiday.

[00:16:04] Guyanese, I shall issue a proclamation declaring 20th of December as National Petroleum Day.

[00:16:11] In those four years from the discovery of oil to the production of it. Kiana Wilbur said herself the task of learning everything she possibly could about the industry and about the company that Guyana was partnering with.

[00:16:23] I distinctly remember I said, okay, you know, I don't know anything about oil and gas and editor in chief at the time, Adam Harris said, You know, I have a book somewhere at home about Exxon.

[00:16:40] The book was one of the all time masterpieces ever written about Exxon Private Empire.

[00:16:46] I'm Steve Coll and I am the author of Private Empire ExxonMobil and American Power.

[00:16:53] Steve Coll is also an investigative journalist for The New Yorker.

[00:16:57] I thought it was hard to report on the CIA, and I came to understand that Exxon was far more difficult and and and a little bit scarier even. I joked with my colleagues that, you know, if I if I disappeared, like, if some van pulled up beside me on the street and I was bundled away. And they never saw me again, that it wouldn't be al Qaeda, which I had reported on. It wouldn't be the CIA, which I would report. I'd probably be excellent. They have that way of creeping people out of intimidation, actually. And it's a it's a strategy. And they're very practiced at it and effective at it. They have a lot of power and resources with which to intimidate people.

[00:17:42] Kiana photocopied Coll's book for her colleagues. Reading it, she could tell she was signing up for a big challenge, but it wasn't all on her shoulders. Her paper Kaieteur News knew that Guyana getting into the oil business was a big deal. So they created an oil and gas desk and put five journalists on it, some for oil, some for gas. They all read those photocopies of Private Empire and then came up with questions they wanted answers for.

[00:18:11] Everyone was armed with pencils and exercise books, notebooks, and they were writing all the questions that we want to ask that you want to find out and do research about.

[00:18:21] As they did their research, they would publish it in a series of weekly articles.

[00:18:25] And we started out with everything you need to know about ExxonMobil. And some of our stories looked at the environmental issues, concerns that countries, civil society groups had about ExxonMobil's operations.

[00:18:45] One of those concerns was, unsurprisingly, climate change and the extent to which a massive new oil project would be exacerbating a problem that the country and the world is already facing. The Guyanese president, Irfaan Ali, has painted sort of a robbing Peter to pay Paul picture, claiming that oil money will help Guyana pay for the cost of adapting to climate change. Never mind that it will also exacerbate the problem. And Guyana's capital, Georgetown, is below sea level already. In fact, it was already below sea level when it was built back in the late 1700s. The Dutch colonized the area and engineered a canal system for Georgetown similar to those they built in the Netherlands.

[00:19:32] I there are hundreds and hundreds of these in Guyana all along the coast. So you have the seawall, but there are breaks in the seawall all along that has these openings, that has a sleuth. And so it's like a gate that opens and closes. So at low tide, it's open to let water out. At high tide, it's closed to keep the seawater out.

[00:19:55] Salvador DeCaires was born and raised in Guyana. Today, he works as a tour guide there.

[00:20:01] And right now, even there are parts of the East Coast and even here during spring tides, you should see the waves coming over the top of this, the wall. So any kind of rise sea level, we are in trouble. How much do you keep building this wall up? At some point, we are going to have to think about moving. And the government is already talking about actually moving the capital back into where the big airport is.

[00:20:36] I was walking around with this yesterday and someone was like why are you walking around with that brush?

[00:20:47] When we got to Guyana, we didn't just head straight for the oil and gas experts and for a drive by of the Exxon headquarters. We wanted to understand the context all these changes were happening in. So we went to the market. We talked to fishermen at the seawall and we hit the National Museum with Salvador. Turns out the Dutch and the British weren't the only colonial powers interested in Guyana back in the 1700s. The French, Spanish and Portuguese all took parts of the country, too.

[00:21:20] You got the treaties and what they used to call British Guiana. Dutch Guiana and French Guiana. Dutch Guiana is Suriname. US go here and Spanish Guyana was here and the narco Spanish and it became part of Venezuela. Portuguese Guyana became part of Brazil. So you've got French--now French, Dutch and English. But the border got changed.

[00:21:47] At this point, Salvador stood in front of a big map of the country to show how these former colonies had been divided into new countries.

[00:21:56] But we gave all this to Brazil, and we gave all of this to Venezuela. So now they claim that this should be the border. So two thirds, again, they say, belongs to them, not us. No way. Sorry. You're not having it.

[00:22:22] In case you missed that, he's saying that Venezuela is laying claim to a portion of Guyana. In fact, they laid claim to a fairly large percentage of Guyana's land and also to all of its offshore area, which means the oil. That border dispute has been going on for more than a century. But the 2015 discovery of oil in Guyana reignited it. By that point, Venezuela had actually kicked out several foreign oil companies, including ExxonMobil.

[00:22:54] The reason why we are we are, we must know, is that Venezuela has denied denied the US companies their rightful share, whatever that need.

[00:23:10] This is Alfred Bhulai, an engineer and energy expert in Guyana, who says there have been various research projects around oil in the country for decades. Today, he works for Transparency Institute, Guyana, which pushes for increased government transparency.

[00:23:28] So I knew there was oil being drilled and certain knowledgeable people knew that, particularly Mr. Burnham in the 1970s. The former president.

[00:23:39] That's former President Forbes Burnham. The country officially gained independence from Britain in 1966, but it didn't have its first entirely democratic election until the early nineties. In the lead up to independence, the most popular party was the People's Progressive Party, the PPP. And at that point in the sixties, it was a cross-racial party led by two men, one of Indian descent, Cheddi Jagan and the other of African descent, Forbes Burnham. Like a lot of other South American political leaders at the time, they were both leftists and they had strong opinions about who should own and benefit from Guyana's natural resources. Not Western oil companies, for one. They wanted Guyana's resources to benefit its people. Also, like a lot of South American countries, Guyana was on the CIA's radar at the time, and they had strong opinions about which of these two men they'd prefer to see in charge of so many resources. Burnham. The one who didn't spend quite so much time with Fidel Castro. As they have done in so many countries, The CIA leaned on racial differences to split the party into two and then backed Burnham.

[00:24:50] Despite its relative stability compared to some of its neighbors. Guyana wasn't a big target for its oil because it sat beneath the ocean floor some 40 miles off the coast. So from the 1970s to the early 2000, the big U.S. oil companies were really concentrating on Venezuela.

[00:25:09] So I am absolutely sure that they knew there was oil there. And just waited and when Venezuela is going to play bad then they said, well, okay, we have oil elsewhere, and then negotiated a very sweet deal. And so so the people who knew about oil knew these things, but the general public didn't.

[00:25:36] Bhulai thinks that it's possible that Venezuela and Guyana's oil are fed by the same reserve, which could be further fueling Venezuela's attempts to stop the drilling in Guyana. All of this got Kiana Wilburg and her team at Kaieteur News thinking about one key question that they had not been able to find an answer to about Exxon's sudden presence in Guyana.

[00:25:59] What's the contract that we have with this company?

[00:26:03] Steve Coll's book Private Empire is filled with details about what kinds of deals countries like Equatorial Guinea, Chad and Guyana's neighbor Venezuela, had struck with Exxon. In 2016, a year after Exxon discovered oil offshore, Kiana and her newsroom wanted to know where Guyana stood compared to those other countries. Equatorial Guinea had only gotten about 8% royalties in its contract. Chad got 10%, but Guyana was more stable and developed than those countries had been when they inked contracts with Exxon. Surely they would get more.

[00:26:40] And it took us a year of rewriting over and over and over and over to release the contract, or at least a contract release and release it.

[00:26:49] Next time on light Sweet Crude.

[00:26:56] This is something that was hidden from media since 1999. No one saw this document.

[00:27:07] The majority of people, including the IMF, have gone on record as saying it was a very unfair deal for them.

[00:27:16] I began talking to someone there and he said he would like to do a case, but nobody would do the case for him to challenge the oil. And I said, I'll do it.

Transcription

Five years ago, Kiana Wilburg was a new reporter when ExxonMobil executives and Guyanese government officials announced they had found oil 40 miles offshore. Wilburg and her newsroom had to quickly learn about the industry and this company that was suddenly so influential in their country and were left with just one question: exactly what kind of a deal had the country signed onto?

Guyana Documents

New Oil Colonialism

S8, Ep2 | The Contract

S8, Ep1 | The Boom

A true-crime podcast about climate change, hosted by investigative journalist Amy Westervelt. Listen here, or 

A true-crime podcast about climate change.

S8, Ep1 | The Boom

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