Despite the challenges of the COVID-19 pandemic and recent political uncertainty surrounding its elections, Guyana is still projected by the International Monetary Fund (IMF) to be the fastest growing economy in the world this year.
“Oil and gas is going to be hugely important to the Guyanese economy,” Nicholas Deygoo-Boyer, Private Sector Commission (PSC) Chairman and President of the Georgetown Chamber of Commerce and Industry (GCCI), told OilNOW on Monday. “If you look at what the IMF’s expected growth rate for the Guyanese economy is [53% in 2020] – the reason it is such an astronomical figure is because it takes into account oil and gas.”
US oil major ExxonMobil began producing oil offshore Guyana last December at the Liza Phase 1 Development which is the first in a series of projects planned at the Stabroek Block this decade. ExxonMobil expects to be producing more than 750,000 barrels of oil per day by 2026 and analysts say production will surpass the 1 million barrels per day mark by 2030. These projections also do not take into account potential development of oil fields outside the Stabroek Block.
“There are many people saying now that we should not be producing oil. We don’t have that option in Guyana. Our people badly need development and we have to make sure that we produce the oil and get as much development out of it for our people to invest long term in other sectors so that they can get wealthier and have a decent life,” Bharrat Jagdeo, Vice President under the newly elected People’s Progressive Party Civic (PPP/C)-led government said.
So far, ExxonMobil has found more than 8 billion barrels of oil equivalent resources spanning 16 discoveries since 2015 at the Stabroek Block. In addition to the two projects – Liza Phase 1 and 2 – which have already been sanctioned, a third at Payara is awaiting final government approvals. The Payara approval, expected since last year, has been delayed due to the elections crisis that engulfed the South American country over the past five months. The new government is conducting a review of the assessment that was done for the project under the previous administration before it grants approval.
“I think what you are seeing here is the transition from the previous government to this new PPP government and they are going to have to work out their methodologies for reviewing and approving the field development plans,” Deygoo-Boyer stated.
He said he is confident that once the new government establishes its own methodology for project approvals, future offshore developments “will be more quickly reviewed and the methodology understood and accepted by all.”