Guyana’s revenue from domestic production is on track to break the $1 billion mark this year and accelerate to $7.5 billion annually in 2030, whereas Africa’s biggest oil producer is struggling with dwindling oil production due to crude oil theft and pipeline vandalism.
Unlike Nigeria, who squandered its 1981 oil boom, Guyana, South America’s third tiniest oil country with a population of about 780,000, is bracing up for an oil boom that could catapult it to the top of the continent’s rich list and ensure that its newfound riches benefit all Guyanese.
Rystad Energy research, independent energy research and business intelligence company forecasts 2022 is set to be a turning point for the Guyana government to start capitalising on the vast reserves in the offshore field, with revenues more than doubling over 2021 levels.
As if the foregoing feats were not remarkable enough, especially during a time when host countries and oil explorers are faced with a confluence of economic aches from the COVID-19 pandemic and the Russia-Ukraine war, Rystad said Guyana continues to set itself apart with low break–evens and below-average emissions intensity.
It said two notable factors will propel Guyana from a relatively small producer to a global leader in the coming years, solidifying the country’s position as a competitive and policy-friendly player for offshore production.
According to Rystad Energy, government revenue from domestic production is on track to break the $1 billion mark this year and accelerate to $7.5 billion annually in 2030.
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“Guyana is just starting to extract and monetize its vast resource wealth, and the coming years will be a financial windfall for the Georgetown government,” said Schreiner Parker, senior vice president and head of Latin America and the Caribbean.
On an annual basis, Rystad said the government’s annual take from production is expected to increase to $4.2 billion in 2025. Government revenue is then projected to fall to $2.4 billion in 2027 on account of a projected drop in oil prices and continued spending on the Stabroek block’s development.
Still, the Norway-based group said production growth is set to accelerate, with revenue momentum resuming as new pre-Final Investment Decision (FID) projects are sanctioned and brought online, leading to peak government revenues of $16 billion in 2036. Importantly, these projections do not factor in undiscovered resources.
In terms of ongoing projects, the Liza Phase 1 development, which began production in December 2019 utilising the Liza Destiny floating production, storage, and offloading vessel (FPSO) with a production capacity of approximately 120,000 gross barrels of oil per day, recently completed production optimisation work that expanded its production capacity to more than 140,000 gross barrels of oil per day.
The Liza Phase 2 development, utilising the Liza Unity FPSO, began production in February 2022 and is expected to reach its production capacity of approximately 220,000 gross barrels of oil per day by the third quarter.
The third development at Payara is ahead of schedule and now expected to come online in late 2023 utilising the Prosperity FPSO with a production capacity of approximately 220,000 gross barrels of oil per day.
The fourth development, Yellowtail, is expected to come online in 2025, utilising the ONE GUYANA FPSO with a production capacity of approximately 250,000 gross barrels of oil per day.
“The country has played the long game after several decades of elusive exploration. The country’s offshore production is finally ready to take off,” Parker explained.
With vast oil reserves, Nigeria is punching below its weight. Foreign investment into Nigeria’s oil and gas hit a low of $101 million in 2021 which is still a sharp decline compared to $327.30 million recorded in the fourth quarter of 2016, data from the National Bureau of Statistics (NBS) shows.
