GUYANA’S oil revenue is on a sharp upward trajectory, and, according to President Irfaan Ali, the country could earn as much as US$10 billion annually by the end of the decade.

This projection, supported by ExxonMobil’s production outlook for the Stabroek Block, is already being foreshadowed by steady growth in the country’s petroleum earnings from just US$198 million in 2020 to US$2.57 billion in 2024.

This growth is being driven by rapid expansion in offshore oil production. Since the start of production in December 2019 with the Liza One project, ExxonMobil and its partners have steadily brought new developments online.

Liza Phase Two started in 2022, Payara came on stream in late 2023, and Yellowtail is set to begin production in August 2025. Uaru is expected in 2026, followed by Whiptail between late 2027 and early 2028, then Hammerhead and Longtail in 2029 and 2030 once approved.

In addition to oil production, the projects will tap condensate and natural gas. Each new project will boost Guyana’s output, with production expected to exceed 1.3 million barrels per day by 2028, and even more by 2030.

More production means more revenue, but that’s only part of the story. Guyana’s share of oil revenue is also expected to increase because of how the Production Sharing Agreement (PSA) works.

Under this agreement, the oil companies are allowed to recover their development costs using up to 75 percent of total annual production value. The remaining 25 percent is split 50-50 between Guyana and the Exxon-led consortium. That means Guyana currently gets roughly 12.5 percent of total oil output. On top of that the country also receives a two percent royalty.

However, as the companies recover more of their costs, the portion of oil needed for cost recovery will shrink. That will leave a larger share of the production available for profit oil, of which Guyana gets half.

So not only will more oil be produced, but Guyana’s percentage take will increase over time. If, for example, only 60 percent of annual production is needed for cost recovery in a few years, then 40 percent becomes profit oil, increasing Guyana’s share to 20 percent. This could happen even with moderate oil prices, as long as production keeps rising and cost recovery levels fall.

Oil prices still matter too. Guyana earned more in 2024 (US$2.57 billion) than it is projected to earn in 2025 (around US$2.5 billion), despite higher production, largely because prices in 2024 and 2025 are lower than in 2023.

But the scale of Guyana’s projected growth in the next few years is so significant that typical market fluctuations will likely not offset the momentum. It would take a full-blown price collapse, like what was seen during the pandemic, to interrupt this tremendous US$10 billion trajectory.

The size of that projection becomes even more striking when compared to Guyana’s 2025 national budget of US$6.6 billion. Oil revenue contributed 37 percent of that, based on approved withdrawals from the Natural Resource Fund.

By 2030, oil earnings alone could be enough to fund the entire budget, with provisions for major infrastructure investment, expanded social programmes, and transformative development.

Guyana is building a future with its oil. Sustaining this momentum demands disciplined management, transparency, and strategic investment.

Staying true to a vision of balancing long-term value with short-term needs will allow Guyana to be a model for transforming resource wealth into national prosperity, for oil-rich countries everywhere.

DISCLAIMER: The views and opinions expressed in this column are solely those of the author and do not necessarily reflect the official policy or position of the Guyana National Newspapers Limited.