Guyana’s oil and gas industry witnessed an explosive growth rate of 98.4% in the first half of 2023, President Dr. Mohamed Irfaan Ali announced on September 9. This boost in the energy sector became the main driver behind the country’s substantial real economy expansion of 59.5% during the same period. The non-oil economy, though overshadowed by its petroleum counterpart, also showed growth, charting a commendable 12.3% increase in the first six months.
The Finance Ministry’s mid-year report indicates that despite facing challenges such as disruptions in the mining sector and an anticipated reduction in some agricultural output due to drier weather conditions, the country remains optimistic about its financial health. The anticipated real gross domestic product (GDP) growth for 2023 is an impressive 28.2%, with the non-oil sector expecting a 9.3% rise. This makes 2023 the third consecutive year marking growth for the non-oil economy, following the disruptions of the pandemic year 2020.
By the end of June, Guyana recorded a staggering total crude oil production of 68.7 million barrels, the Ministry stated, over the 34.6 million barrels during the same time frame in the previous year. One notable contributor to this spike in production was the Liza Unity floating production, storage and offloading vessel (FPSO), which began its operations on February 11, 2022. By the first half of 2023, it had ramped up its production rate to approximately 227,000 barrels daily. With the anticipated operational commencement of the Prosperity FPSO in the last quarter of the year, the oil sector’s growth forecast stands at an encouraging 39.6% for 2023.
The government’s revenue also painted a rosy picture for the first half of the year. From the eight lifts of profit oil – three from Liza Destiny and five from Liza Unity FPSOs – the government pocketed a revenue of US$705.2 million, the Ministry stated. This sum included the revenue from two lifts in the last quarter of 2022 and seven lifts from the first half of 2023. Additionally, royalties added a handsome US$110.8 million to the government’s coffers for production and sales from 2022Q4 and 2023Q1.
Though the country’s oil-rich potential paints an optimistic economic canvas, global demand-side concerns and financial disruptions threaten to impact oil prices and, consequently, Guyana’s revenues. However, with the current projections and the anticipated closing balance of the NRF at US$2 billion by year-end, Guyana’s financial trajectory is firmly positive.
