With 13 lifts this year, Guyana’s oil revenues to double
The Guyana government anticipates that there will be a total of 13 lifts of profit oil for 2022.
In keeping with global oil prices, the government projects to rake in US$1.1 billion from the sale of the country’s share of profit oil, and US$147.7 million in royalties.
During the first six months of the year, the Government had five lifts of profit oil from the two producing Floating Production and Offloading Vessels (FPSOs).
Further, the Government received US$307 million in revenue from their share of profit oil, along with royalties to the tune of US$37.1 million, in the first half.
The cumulative balance on the Natural Resource Fund, inclusive of interest income, was US$753.3 million, after withdrawing US$200 million in May.
At the end of 2021, some US$607 million was deposited into the NRF.
These figures were released on Saturday in the 2022 Mid-Year Report.
From May 2015 to present, 38 discoveries were made offshore Guyana with 33 of those discoveries occurring in the prolific Stabroek Block.
Since the first Liza discovery in 2015, Guyana’s recoverable resource now stands at approximately 11 billion oil-equivalent barrels. This exponential increase places Guyana at number 17 for the largest reserves in the world.
When the Liza Destiny FPSO began crude oil production in December 2019, it was estimated that the Liza Phase 1 well would produce at a rate of 120,000 barrels per day (BPD) at peak oil extraction. At the end of June, that well was performing at an average rate of 137,000 BPD, notwithstanding technical challenges over the years.
At the end of June 2022, Guyana’s cumulative profit oil earnings from the Liza Phase 1 well stood at US$747.1 million. On February 11, 2022, first oil flowed from the second FPSO – Liza Unity.
The addition of this FPSO – which has the capacity to produce at a rate of approximately 220,000 BPD – brings Guyana’s productive capacity to over 350,000 BPD. The Liza Unity FPSO continues to ramp up to its peak production rate, and at the end of the first half-of the year, brought in US$102.5 million in profit oil revenues for the Government.
In the medium-term, the four approved projects are expected to produce over 820,000 BPD by the first quarter of 2026. The third and fourth projects, Payara and Yellowtail, are approved and projected to produce 220,000 BPD and 250,000 BPD, respectively.
Plans for the fifth project, Uaru, are expected to be submitted later this year for review by Government. Current projections show that by 2029, Guyana will have the capacity to produce over 1 million barrels of crude oil per day. Guyana’s current estimated recoverable gas stands at over 17 trillion standard cubic feet.
Under the Yellowtail Petroleum Production Licence (PPL), the Licensee is required to do a Gas Utilization study which would aid in determining the most beneficial use of the country’s gas reserves.
The Lize Phase one and two projects will be exporting a total of 50 million standard cubic feet of gas per day through a 12-inch pipeline that will run for 225 kilometres from the two offshore fields.
This gas will be utilised at the Integrated Gas Fired Power Plant and Natural Gas Liquids in the Wales Development Zone. These facilities will provide low cost, reliable and cleaner power for Guyana, as well as enable the advancement of heavy manufacturing and industrialization in our economy.
Government remains cognisant of the need to take preventative and mitigating actions to guard against the Dutch Disease and the resource curse syndrome.
The updated Natural Resource Fund Act 2021 lays the basis for strengthened governance in relation to the management of the sector, and for improved transparency.
Further, Government in December 2021 passed the Local Content Bill and has since established a Local Content Secretariat (LCS) under the Ministry of Natural Resources to monitor compliance and promote business growth as the petroleum industry expands.