Yet as Guyana heads into an election March 2, the almost surreal reversal of fortune is turning out to be a source of strife for this jungle-covered former British colony. Many here worry that the country—which has virtually no oil experience—is wildly unprepared to become the planet’s new petrostate.

An oil-sharing deal with Exxon Mobil Corp. is estimated to shower Guyana with nearly $170 billion in revenue in coming decades, a giant windfall for a country of 780,000 people with an annual budget of about $1.4 billion and the lowest per capita income in South America after Bolivia. 

It’s also kicked off a fuss over fairness and secrecy over the price of the contract and how it was handled. At the heart of the debate is a renegotiated production-sharing agreement signed in 2016 by Guyana’s natural resources minister—just days before Exxon disclosed an increased estimate for the size of its find.

Amid mounting criticism of the terms, Guyana’s resources ministry recently hired U.K. law firm Clyde & Co. to examine the circumstances leading to the 2016 deal. It found that Exxon pressured Guyanese officials into signing the deal in a short time frame, “presumably because knowledge of a ‘world class’ discovery could have altered the government’s negotiating position,” according to a copy of the Jan. 30 investigative report reviewed by the Journal.

The resources minister, Raphael Trotman, a close political ally of Mr. Granger’s, agreed that Guyana might have secured better terms with Exxon with a lengthier negotiation, but called the rush to sign with the American oil giant necessary due to hostilities with neighboring Venezuela, which in the past had sent naval vessels into Guyanese waters in a dispute over the territory where the oil was found.

“This is all new to us,” Mr. Trotman said in an interview. “We’re a nation of skeptics. We’ve never had anything good going our way and even the possibility of prosperity scares people.”

Exxon declined to discuss whether it pressured Guyana’s government. It defended the deal as fair for a first-time producer such as Guyana.

“It offers globally competitive terms,” said Exxon spokesman Casey Norton. “It was done at a time where there was significant technical and financial risk.”

The deal comes at a good time for Exxon, which has been struggling to maintain its leading status among global oil companies in recent years. Exxon expects a return of at least 30% in Guyana, more than double the 15% return the industry regards as the lowest necessary to justify investment.

Since first striking oil there in 2015, the Exxon-led consortium, which also includes Hess Corp. and China National Offshore Oil Corp., has repeatedly raised estimates for how much it can recover, and recently upped it to more than 8 billion barrels. The first vessel carrying Guyanese oil, which is extracted 120 miles offshore and sold directly to market, set sail last month.

The dispute over the contract has sharpened divisions in Guyana, which has been riven by racial tensions among its citizens, mostly descendants of African slaves and indentured laborers from India, since becoming fully independent from Britain in 1966. Before the discovery of oil, the country’s biggest industries were gold mining and rice and sugar farming.

Global Witness, a London-based watchdog group that seeks to expose what it sees as resource exploitation in poor countries, estimated in a report this month that the deal pays Guyana some $55 billion below market value for its resources over three decades. The group also provided documents to the Journal about the process that led to the renegotiation.

Global Witness’s report prompted a response from the People’s Progressive Party, the group of largely Indian Guyanese that had held power for two decades before a multiethnic coalition won a one-seat majority in the country’s parliament and made Mr. Granger president in 2015.

“We were underserved in the negotiations,” said Bharrat Jagdeo, a former president and head of the opposition party, in a public statement after the report’s release. “Guyana did not get its fair share of the deal.”

That in turn led Mr. Granger’s government to accuse Global Witness and other outsiders of interfering in the March 2 election.

“This timing cannot be seen as a coincidence and it appears as though it is seeking to influence the electoral outcome,” it said in a response to the Global Witness report. “It is time that the people of Guyana enjoy the right to self-determination and their own destiny without interference of foreign influences.”

Jonathan Gant, senior campaigner at Global Witness, said his group is nonpartisan. “The Guyanese people deserve accountability and transparency into how this deal was negotiated and in whose interest,” he said.

Despite the fallout, neither Mr. Granger’s coalition nor the main opposition party have said they want a wholesale renegotiation of the contract with Exxon, or a halt to the gusher of money it is about to bring. But both say other contracts signed after 2016 could be revoked and future deals, including with Exxon, will require better terms. Both sides have also said they would evaluate direct-cash transfers of oil proceeds to citizens as a way to distribute the wealth.

First discovery

Guyana initially signed an exploration agreement with Exxon in 1999. While an assessment by the U.S. Geological Survey had estimated more than 13 billion barrels of crude below the seabed, which wraps around the shoulder of South America, Guyana logged some 40 dry wells before Exxon made its first discovery in 2015, according to Robert Persaud, Mr. Trotman’s predecessor as natural resources minister.

Previous governments had struggled to keep companies interested in exploring due to hostilities with neighboring Venezuela and Suriname, both already oil producers. Each had sent gunboats, seeking to reclaim disputed waters from Guyana, which has no navy, paralyzing operations for long stretches. An earlier Exxon partner, Royal Dutch Shell PLC, pulled out in 2014, selling its shares for $1.

Mr. Granger took office in May 2015, days before Exxon’s first find. Within three months, Venezuelan President Nicolás Maduro issued a decree rekindling a century-old border controversy, claiming two-thirds of Guyana. Seeking international support, Mr. Granger turned to his oil partners, publicly arguing that major companies from the U.S. and China would serve as a deterrent to Venezuelan aggression. A case over the border dispute is currently with the United Nations’ International Court of Justice.

The task of renegotiating the oil deal was granted to Mr. Trotman, a family lawyer and former speaker of parliament with little energy experience. As co-founder of the Alliance for Change Party, he was a vital part of the coalition that made Mr. Granger president. Mr. Trotman said his orders from the president were to work toward getting oil flowing as quickly as possible.

On June 23, 2016, Mr. Trotman emailed a consultant hired to advise the government on oil and gas issues, saying Exxon had asked for an extension of some drilling leases that were set to expire, according to a person familiar with the matter. Mr. Trotman wrote in the email that he saw it as an opportunity to revise some of the terms of the 1999 agreement, which split output 50-50 with an additional 1% royalty for the country.

The consultant sent back his thoughts on Mr. Trotman’s proposed changes on June 27, and suggested the government should get no less than if it allowed the contract to expire and opened the field to bidding. The consultant suggested a 10% royalty might be appropriate.

Another adviser hired by Mr. Trotman’s ministry had previously counseled that Guyana should ask for a 15% royalty, according to two people familiar with the matter. That adviser also suggested Mr. Trotman work with a team of 10 or 20 experts on the renegotiation. The ministry had only one.

Unknown to either adviser, Mr. Trotman signed a new deal with Exxon four days later on June 27, 2016, the same day the consultant sent back his suggestions. It kept a 50-50 production sharing agreement from 1999 in place after Exxon takes 75% of annual output to recoup its investments and upped Guyana’s royalty to 2%. It also included a signing bonus of $18 million.

Three days after the signing, Exxon announced that results from a second exploratory well led it to believe it could recover as much as 1.4 billion barrels of oil and gas from the Guyana field, double what it had publicly revealed before the renegotiation.

The new deal wasn’t made public for months. The government has said it wanted to keep the deal quiet in the midst of its border arbitration case with Venezuela, and that legal fees are being paid for with the signing bonus.

The Clyde & Co. report found that Mr. Granger, the president, chaired a meeting with an Exxon representative six days before the new deal was signed. But three advisers to the president told the Journal that Mr. Granger only learned of the new terms in early 2017, when one of them suggested a contract renegotiation to Exxon and was told by the company that a new pact, extending to 2026, had already been inked.

Representatives for Mr. Granger declined requests for comment, and he wasn’t interviewed by the law firm for the report.

Mr. Trotman said that he informed other members of the country’s cabinet.

The report, commissioned by Mr. Trotman, supported his position that he briefed the cabinet about his intentions to renegotiate, and cited Venezuela concerns as a key driver for the government.

Jan Mangal, who served as petroleum adviser to Mr. Granger from 2017 to 2018, believes the government got a bad deal.

“We had all of the bargaining power and it was just given away,” said Mr. Mangal, a former Chevron project manager and native of Guyana.

A vocal critic of the deal, Mr. Mangal well understands it has become divisive. One of the deal’s defenders in Guyana is his brother, Lars Mangal, who is a lead investor in one of Exxon’s largest local service providers, Guyana Shore Base Inc.

“We have completely different views and objectives,” Jan Mangal said. “It has been tough, I’m not going to pretend that has been OK in terms of the family.” The brothers say that while they respect each other’s views, their difference of opinion has led to some tough conversations at the dinner table.

Lars Mangal, a former executive for oil field service giant Schlumberger Ltd., said he believes his brother is missing the forest for the trees. He said Guyana could perhaps have extracted better concessions from Exxon, but getting oil flowing quickly was paramount, especially because of long-term questions about global demand for oil.

“You have to think about the macro and maximizing your potential as early as possible,” Lars Mangal said. “It’s good to have debate, don’t get me wrong, but I certainly hope that my views prevail.”

Mr. Trotman was stripped of the oil portfolio in 2018 after the government created a new energy department. He said he and the deal he signed have been unfairly villainized by some of his compatriots. He hopes oil money will soothe hard feelings.

“I’m a man of great faith and I believe it’s going to be a true blessing for Guyana,” he said. “I expect it will bring us closer together.”