–funds in NRF now over US$719M

RETURNS from the most recent sale of Guyana’s oil have exceeded US$96 million, the highest on record since the country started producing and exporting this commodity.

While the price of oil is usually volatile, this increase in returns recorded by Guyana was fuelled by high world market prices that were influenced by the ongoing war between Russia and Ukraine.

The country, last December, had recorded returns of US$73 million, which is roughly US$23 million less than its most recent earnings in February.

Specifically, according to figures from the Central Bank, Guyana earned G$20,000,929,000 (approximately US$96M); this pushed the country’s overall direct returns from the oil-and-gas sector to US$719,713,039.

Although various reports show that world market prices for this commodity have started to decline, Brent, the benchmark used by Guyana to sell its oil, remains above US$100 per barrel.

And should this remain the same, or be marginally adjusted, the country could earn over US$100M from the sale of its next one-million-barrels of oil.

It was reported recently that revenue generated from the local oil-and-gas sector is expected to catapult Guyana to the ranks of wealthiest countries in the Western Hemisphere, thereby increasing the government’s fiscal space to invest in initiatives geared at expanding the economy, and improving the overall welfare of citizens.

“Guyana is now poised to be one of the wealthiest countries in the hemisphere; we intend to employ the gains from exploiting these deposits into initiatives geared at expanding the economy, improving competitiveness, giving people the best social services, increasing productivity, enhancing food production, and building new sectors,” President Dr. Irfaan Ali said in his keynote address during a virtual faculty workshop on the microeconomics of competitiveness hosted by Harvard Business School.

In painting a vivid image of what is expected from the oil-and-gas sector in the near term, Dr. Ali said that by 2025, operating cash flow, based on total investment, is expected to reach US$3.5 billion.

The performance of this sector is expected to improve even further as the years go by, since the success rate is 80 per cent, and there are already 28 commercial discoveries in the Stabroek Block.

With this, the country has estimated recoverable resources of over 10 billion oil-equivalent barrels.

The Stabroek Block currently has three identified production areas, namely: Liza Phase One, Liza Phase Two, and Payara. Production capacity is expected to reach 340,000 barrels per day following the commencement of production at Liza Phase Two.

This is expected to increase to 560,000 barrels per day in 2024, when the Payara project comes on stream.

Further, with an anticipated fourth production area, the Yellowtail, estimates are poised to reach 810,000 barrels per day by 2026/27, and additional developments under consideration could see Guyana reaching one million barrels per day by 2030.

Operators within 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, exploration activities will continue in the Kanuku Block.

As reported, in the third quarter of this year, the government will be holding auctions and bidding rounds for available acreages of offshore blocks.

“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 the same time bring financial gains for the country,” Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh said recently.