The first tanker has sailed and Guyana is now among the oil producing countries of the world. Annual revenue is set to move from around US$300 million in the first years to US$10 billion per annum by 2030.
“The economic fortunes of Guyana, with a population of only around 800,000, are poised for a major transformation after its first-ever oil development commenced production just six weeks ago,” Rystad Energy said in a report on Tuesday.
The country, from day 1 of oil production, has been placed on a trajectory that could see it becoming one of the richest in the world. But this depends on the prudent management of the billions of dollars that would be flowing to government’s coffers in the coming years.
“Guyana has opted to receive its royalties in cash,” Director of the Department of Energy, Dr. Mark Bynoe told OilNOW on Tuesday in response to questions about how the first revenue influx from oil production is being handled.
The Petroleum Agreememt Guyana has with ExxonMobil and the Stabroek Block co-venturers allows for royalty to be paid either in cash or kind, according to Article 15.6.
“All revenues (royalties and profit oil) will be deposited in the Natural Resource Fund account opened with the Federal Reserve Bank of New York as previously reported by Minister of Finance, the Hon. Winston Jordan,” Dr. Bynoe further added.
“They’re going to get about $300 million a year. But by 2024, when production ramps up to about 600,000 barrels, it’s going to be $5 billion a year. That’s a big jump. In absolute terms, it’s very significant…” says David L. Goldwyn, President of Goldwyn Global Strategies and former U.S. State Department’s special envoy and coordinator for the Office of International Affairs.
Guyana will sell its first 1 million barrels of oil from the Liza Phase 1 development within days, marking the start of a journey that will provide an unprecedented opportunity for the country to change its fortunes from one of the poorest in the region to one of the most prosperous.
