Saturday, May 21, 2022

Oil to drive historic 47.5% GDP growth for Guyana; world’s highest forecast for 2022 – finance minister

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Senior Minister with responsibility for Finance in Guyana, Dr. Ashni Singh disclosed on Wednesday during the reading of the GY$552.9 billion (US$2.76 billion) 2022 national budget that Guyana’s real GDP is projected to grow by 47.5 percent; a rate of growth no other country in the world is currently projected to achieve in 2022. He said this reflects the coming into operation of the second FPSO vessel, the Liza Unity, which will significantly ramp up oil production to 340,000 barrels of oil per day.

As a new oil and gas producer and the country with the 17th largest oil reserves in the world to date, Dr. Singh said the oil and gas sector promises to be the driver of historically high levels of growth in the Guyanese economy with strong positive spillovers into the non-oil economy.

He said this is already observed in the country’s economic performance over the past two years, while noting that the external environment remains supportive with demand for oil anticipated to exceed pre-pandemic levels in 2022 and a very positive near-term outlook.

Dr. Singh said, “Ongoing exploration activities have continued to yield positive results, with 28 commercially viable oil discoveries to date in the Stabroek Block and an estimated recoverable resource of over 10 billion oil-equivalent barrels, a mere 6 years after first discovery.”

The Stabroek Block currently has three identified production areas: Liza 1, Liza 2, and Payara. Production capacity is currently at 120,000 bpd with the Liza Destiny FPSO in operation. The coming into operation of the Liza Unity FPSO early in 2022 will raise capacity to 340,000 bpd, and the deployment of the Liza Prosperity FPSO in 2024 will further raise capacity to 560,000 bpd.

With Yellowtail, the anticipated fourth production area, the finance minister said estimates are poised to reach 810,000 bpd by 2026/27 and additional developments under consideration could see Guyana reaching 6 FPSOs producing 1 million bpd by 2030.

Additionally, he pointed out that the current estimate of the gas reserve is 16 trillion cubic feet (Tcf) with projections from Liza 1 and 2 likely at 50 million standard cubic feet per day (mmscfd) and Payara will bring an additional 20 mmscfd. This augurs extremely well for the US$900M Gas-to-Energy Project, the official stated.

Meanwhile, Dr. Singh said development works on Payara and Yellowtail are ongoing, and the exploration programme will continue in 2022. In this regard, he said the operators in the Kaieteur and Canje Blocks also advanced exploration programmes in 2021, with additional wells likely to come online in the last quarter of 2022. In addition, he said exploration activities will continue in the Kanuku block.

The senior finance minister also reminded that in the third quarter of this year, government will be holding auctions and bidding rounds for available acreages of offshore blocks. Dr. Singh said this will be done in an open and competitive manner which will allow for a more marketable approach to Guyana’s resource development and at same time bring financial gains for the country.

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