Guyana expects billion-dollar oil earnings this year

Sep 4, 2022, 8:49 PM | Updated: Sep 5, 2022, 8:53 am

GEORGETOWN, Guyana (AP) — Guyana is likely to earn more than $1 billion this year from its production share of offshore oil exports — more than it will garner from gold, bauxite, timber or any other sector, the central bank said Monday.

The production sharing agreement with American ExxonMobil, Hess Oil of the U.S. and China’s National Offshore Oil Company will give the country an estimated $1.1 billion from the 13 million barrels of oil it is entitled to this year, central bank Governor Gobind Ganga told The Associated Press.

The small South American nation, which hosts the headquarters of the 15-nation Caribbean Community, became an oil producer in 2019 when Exxon lifted the first batch of oil from the seabed — four years after it had announced a massive find about 120 miles offshore Guyana.

The consortium has already drilled more than 30 successful wells, mainly from its Liza Field in the Stabroek Block. Current production is about 350,000 barrels per day but this is expected to more than double when two other oil fields come on stream in the next three years, Exxon has said.

Until oil production began, gold and rice exports had dominated the country’s foreign exchange earnings. With global petroleum prices high, the country expects to enjoy a windfall both from direct oil sales and the massive support system for the industry, including the construction of onshore facilities.

“This is historically the largest amount of revenue we will earn from any single sector this year. This is very obvious with the price of oil today,” Ganga said. Finance Minister Ashni Singh recently projected that gross domestic product would grow by 56% this year, by far the fastest pace in the hemisphere.

The 2015 announcement by Exxon that it had found some of the world’s lightest crude oil has triggered a rush by most of the major producers, with Repsol of Spain, Tullow oil of the United Kingdom and several others either buying into existing oil blocks or negotiating their own.

Commercial oil and gas deposits have been discovered in two additional blocks neighboring Exxon’s, while companies neighboring Suriname have also found large quantities of oil and gas in the basin that the U.S. Geological Survey says contains at least 16 billion barrels of oil.

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Guyana expects billion-dollar oil earnings this year