Georgetown, Guyana—Guyana has sold $750 million worth of carbon credits to the US oil group Hess, which drills off the coast of the small South American country that is 89 percent virgin forest.
President Irfaan Ali said the deal was “historic for corporations, voluntary markets, industries, countries and for forested countries,” as he signed the agreement with Hess at the presidential residence in Georgetown.
Hess CEO John Hess said the accord “would serve to protect the country’s vast forests, one of the largest carbon sinks in the world, and provide capital to improve the lives of Guyana’s citizens through investments made by the government as part of its low carbon development strategy.”
Hess is one of three partners, along with the China National Offshore Oil Corporation and ExxonMobil, operating in the huge Stabroek oil field off the coast of Guyana.
Guyana, with 800,000 inhabitants, is already the country with the most reserves per capita in the world — over 10 billion barrels of oil equivalent — ahead even of Brunei, Kuwait or the United Arab Emirates.
Under the deal, Hess is to pay the $750 million within the next 18 months.
Ali pointed out that Guyana has 18 million hectares — or 89 percent of the country’s forest — still intact and that it is storing 19.5 gigatonnes of carbon, worth an estimated $40-50 billion a year.
Guyana also boasts the second highest percentage of forest cover on earth.
Vice President Bharrat Jagdeo predicted that with the sale of carbon credits, “the market will move.”
“We are hoping for prices to rise in the voluntary market, as prices were at abysmal lows, and this major deal will resonate globally and cause major change,” he said.
He added that $112 million of the money from the Hess Corporation purchase of carbon credits would go to indigenous communities.
“We made a commitment that 15 percent of all of the proceeds from any sale of forest carbon will go to Amerindian communities,” he said.