Oil can “profoundly” transform Guyana’s economy – IMF

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Shikema Dey
Experienced Journalist with a demonstrated history of working in the media production industry and a keen interest in oil and gas, energy, public infrastructure, agriculture, social issues, development and the environment.

With a discovered petroleum resource count of close to 11 billion barrels of oil equivalent, Stabroek Block operator ExxonMobil has churned out big wins for Guyana.

Now, the International Monetary Fund (IMF) said that when this number tips over, Guyana’s commercially recoverable petroleum reserves will be ranked as one of the highest per capita in the world.

“This could help Guyana build up substantial fiscal and external buffers to absorb shocks while addressing infrastructure gaps and human development needs,” the IMF said.

Exxon has already scored 33 discoveries since 2015 with two offshore oil platforms in production and two more to come online by 2025.

The IMF said that oil production has the potential to transform “profoundly” Guyana’s economy with its overall real gross domestic product (GDP) projected at 57.8% this year. The government made the same projection back in July bumping it up from 47.5%, which was projected early in the year before Russia’s invasion of Ukraine.

The government further revised its 2022 growth forecast to 56%, in its mid-year report released early September.

Oil-producing nations benefited from this scenario as prices had stayed above US$100 per barrel for several months. In Guyana’s case, Americas Market Intelligence (AMI) had projected the country would benefit the most from the high oil price situation in Latin America.

According to the IMF, the main downside risks to its outlook for Guyana include volatility in global oil prices, a slowing global economy or rapid increases in investment which could lead to macroeconomic imbalances.

On the other hand, it said the super upside risks include higher global oil prices and additional gas and oil discoveries.

Exxon is hoping to strike even more black gold offshore Guyana. It is currently engaged in a 25-well campaign in the Stabroek Block. Next on its target are the Sailfin-1 and Banjo-1 prospects.

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