The oil and gas sector, which continues to grow amid Guyana’s reputation as the fastest growing economy, is responsible for approximately US$700 million in revenue that is retained and spent within Guyana, helping to fuel economic growth.
According to the 2023 Guyana Energy Brief, which was released by the Natural Resources Ministry, the Local Content Act of 2021 was able to secure benefits for Guyana and in the process, put revenue from the oil and gas sector directly into the hands of locals.
“The People’s Progressive Party/Civic (PPP/C) Government is resolute in ensuring that Guyanese benefit directly from the blossoming petroleum sector. It is in keeping with this fidelity that the Government implemented the Local Content Act a year ago, which prioritises Guyanese nationals and companies for the supply of goods, services and capacity development.”
“Through these local content measures, Guyana retains an estimated US$700 million annually in revenue spent in-country. As the petroleum sector balloons, so will the local content revenue,” the Ministry said in the energy brief.
It was pointed out by the energy brief that the billions of dollars in investments and expansions in Guyana’s oil and gas industry have boosted growth in the non-oil industry, including in agriculture, construction and manufacturing sectors.
“Across every sector, whether it be hospitality, construction, medical services, machinery, catering, agriculture or mining, a significant widening of growth levels has manifested. This has translated into more opportunities for training, employment, economic diversification and overall social change,” the brief added.
As the world’s fastest-growing super basin in recent years, Guyana is estimated to have potential resources in excess of 25 billion barrels offshore. In the oil-rich Stabroek Block alone, which is operated by ExxonMobil and its co-venturers, there are nearly 11 billion barrels of oil equivalent.
Discoveries
To date, there have been some 35 discoveries in the Stabroek Block, where production activities have been ongoing since 2015, and a total of 40 oil finds for all blocks being explored offshore Guyana.
Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), is the operator of the Stabroek Block and holds 45 per cent interest in the block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
Currently, Liza phase 1 and phase 2 developments in the Stabroek Block are operating at a combined gross production capacity of more than 360,000 barrels of oil per day (bpd) using the Liza Destiny and Liza Unity floating production, storage and offloading (FPSO) vessels, respectively.
The third development in the Stabroek Block – Payara – is on track to come online by the end of 2023 with a gross production capacity of approximately 220,000 bpd. While this may be the gross production capacity, it is expected that the startup will see a much smaller number of oil barrels being produced. For instance, when Liza phase two started in 2022, it was producing significantly less than its current production.
Meanwhile Yellowtail – the fourth development – is slated for 2025 with a production capacity of some 250,000 bpd. Both these development projects have been approved by the Guyana Government.
Uaru is the fifth development and is expected to come online at the end of 2026 with a gross production capacity of approximately 250,000 bpd with first oil anticipated at the end of 2026. The development plan for Uaru was submitted for Government approval in November 2022 and final approval is expected by the end of the first quarter of this year.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. They are meanwhile seeking project approval for their sixth oil development in Guyana’s waters, approaching the Environmental Protection Agency (EPA) for environmental authorisation for its Whiptail Project.
