The Inter-American Development Bank (IDB) has commented in one of its latest publications that Guyana’s oil boom will drive hydrocarbon exports beyond US$3 billion this year and also account for 59.7% of Gross Domestic Product (GDP).
It further noted in its August report that oil production will continue to drive GDP growth, government revenues, and expenditures in the medium term based on output from two floating, production, storage, and offloading (FPSO) vessels.
Expounding on the country’s performance, the IDB said the value of oil exports increased from US$1 billion in 2020 to US$3 billion in 2021 and is expected to continue increasing beyond this for 2022 and in the medium term. The bank said too that the growth of exports of goods and services is expected to average 77% in 2020–2023 and then fall in 2024, though these estimates will be updated once new FPSOs begin oil production by 2025.
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Additionally, the IDB said GDP growth is expected to average 36.3% over 2020–2023 before stabilising to 3.7% over 2024–2027.
As regards government revenues, it said this had declined by 6% in 2020 but is expected to recover to an average annual growth of 24% over 2021–2024.
Since oil production began in 2020, the IDB said it is significant to note that the real economy has “re-balanced significantly.”
In 2020, the first full year of oil production, it noted that GDP growth reached 43.5%, and is expected to grow by 47.5% in 2022. In 2021, GPD growth moderated to 19.9%.
For its part, the non-oil economy contracted by 7.3% in 2020 and grew by 4.6% in 2021. In 2022, the non-oil economy is projected to grow by 7.7%, driven by growth in agriculture, mining and construction.
The IDB further noted that agriculture and gold production contracted in 2021 but are projected to grow by 8.9% and 12.2% respectively in 2022. The manufacturing and construction sectors are also expected to grow by 14.3% and 10.5% respectively, while the large services sector is projected to grow by 3.8%.
In summary, the IDB said the new oil economy has rebalanced as follows: oil and gas are estimated to represent 59.7% of GDP in 2022, followed by services at 16.7% (down from 40% in 2019), agriculture at 10% (down from 25% from 2019), and gold production at 4% (down from 11% in 2019).
Seven more oil discoveries were announced in Guyana’s Stabroek Block in early 2022, increasing the estimated recoverable resources from approximately 10 billion recoverable oil-equivalent barrels in late 2021 to approximately 11 billion oil-equivalent barrels.
The Liza Phases 1 and 2 projects are currently producing, with production capacity at approximately 360,000 barrels per day. The second project came on stream in February, nearly tripling capacity.