OVER the last few years, investments have positioned Guyana as an emerging leader in the Caribbean and on the global stage. With proven reserves now surpassing 11 billion barrels of oil and some estimates predicting that total reserves could, one day, be as high as 20 billion barrels, the future of production is long and fruitful. In 2022 alone, Guyana’s GDP is expected to grow by 49.7%, largely driven by the oil sector.
The recently approved Yellowtail development project, financed by a US$10 billion investment from the Stabroek Consortium, is expected to begin production by the end of 2025. This represents the largest single investment in Guyana’s history. Stabroek Block operator, ExxonMobil, recently announced it was proceeding with the final investment decision (FID), a crucial step to bringing the project to life. Additionally, contracts to construct, install and operate the “One Guyana” FPSO have been awarded to SBM Offshore. As the fourth oil development in the Stabroek Block, the Yellowtail development project is expected to add approximately 250,000 barrels of oil per day to Guyana’s production.
While Guyana currently accounts for less than 1 percent of global oil production, the size of the investments so far makes it one of the top global destinations for investments in offshore oil and gas development. The billions of dollars of investments will filter down into all areas of the economy, with agriculture, hotels and construction all expected to boom in the years to come. International, regional, and U.S.-based companies are already taking an interest and lining up to seek partnerships in areas and sectors across the country, a sentiment echoed by Guyana’s Vice President, Bharrat Jagdeo, who stated recently, “Diversification of interest is good for our country.”
Guyana’s production is set to reach 800,000 barrels per day as early as 2025, including Yellowtail, Payara, Liza Phase 1 and Liza Phase 2. When compared to its peers like Venezuela, a long-time oil producer now averaging about 668,000 barrels per day, or Mexico which produces about 1.5 million barrels per day, Guyana’s rapid development is a remarkable achievement. Mexico announced plans to end oil exports by 2023, leaving the field wide open for Guyana to become one of the leading regional producers.
The global reach of Guyana’s oil industry is also growing Guyana’s stature in other areas like sports and tourism.
Just recently, Guyana secured the coveted spot as host nation for the semi-finals and finals of the Caribbean Premier League (CPL) for the next three years. The Caribbean has a long history of being united through sports and some G$2.2 billion were allocated to that effort in the 2022 budget, which included oil revenues for the first time.
Guyana is also expanding its global presence in the business community with the International Energy Conference and Expo, which attracted regional leaders and executives from many of the world’s largest companies to Georgetown in February. The Expo will host its second staging in February 2023.
Guyana is also making progress towards ending its reliance on expensive and unreliable fuel imports to provide electricity. Former Caribbean Development Bank economist, Justin Ram, recently outlined how the gas to power project could support broader economic growth by eliminating the high costs and regular blackouts that have plagued the country. He also cited gas-to-power as a natural next step for the country that could help meet the goals of the Low Carbon Development Strategy by supporting renewables and lowering emissions.
Guyana is laying the groundwork to become a regional powerhouse in energy and strategic leader in the Caribbean. Sustained investment will bring about an economy capable of standing toe-to-toe with the most advanced countries in the world and it begins with every Guyanese man, woman and child harnessing the opportunities that the oil and gas sector will create in the years and decades to come.