EVEN as Guyana continues to discover more oil, the country’s petroleum earnings continue to get bigger and bigger. So much so that by the end of the first half of 2021, exports from the industry surpassed US$1.2 billion. This marks a significant growth, since the oil earnings for the corresponding period last year stood at only US$438.4 million.

This outturn, according to a recently released mid-year report, can be attributed to both an increase in the volume and average export price of crude oil over the review period.

The report outlined too that at the end of the first half of 2021, the average international price of Brent crude oil was 57.6 per cent higher than the average price recorded in the first half of last year, reaching US$65 per barrel.

As oil prices continue to rise even further, Guyana’s petroleum revenues will remain on an upward trajectory. As a matter of fact, the country’s eighth oil lift, slated for November, is positioned to rake in close to US$80 million, as the price of Brent crude continues to hover at $79.00 per barrel.

The projected earnings could rise even further, but if oil prices remain the same when the eighth consignment is lifted, then the country could earn at least US$79,240,000 or G$16.5 billion from its latest sale, making it the most lucrative yet.

A Reuters article said that based on projections, Brent crude could reach $90 per barrel by the end of the year, largely owing to the coronavirus pandemic. If this happens, Guyana’s year-end oil lifts could reach US$90 million, or G$18.8 billion.

It was only in August that Minister of Natural Resources, Vickram Bharrat, announced that Guyana had received payments for its seventh oil lift to the tune of US$79,617,561.87, the largest single oil payment the country has received to date.

In a statement issued then, Bharrat said that the aforementioned payment was for 1,047,820 barrels of oil, which was extracted from the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel on July 3, 2021.

The seventh oil lift brought the country’s oil extractions to a grand total of 7,056,262 barrels, and earnings to US$436 million. Guyana sold its first one million barrels of crude on February 19, 2020, raking in nearly US$55 million. In its second million-barrel sale, the country received US$35 million, and another US$46 million as proceeds from the sale of its third million-barrel of crude, and US$49.3 million from its fourth oil lift.

In early March, Guyana also received US$61,090,968 (approximately G$13 billion) from the sale of the nation’s fifth oil lift. Further, it earned in excess of US$60 million from the sale of its sixth oil lift, and received US$13.9 million in royalties during the first quarter of this year.

It was reported in May that the country’s total revenue is expected to increase by 17 per cent, with earnings in the petroleum sector alone reaching well over US$500 million by the end of this year. With oil prices on a continuous rise, that figure could further skyrocket.

COULD DOUBLE
Additionally, with ExxonMobil Guyana and its partners preparing to embark on its largest exploration campaign within the Guyana basin, Guyana’s oil finds could more than double by 2025.

According to a publication by OilNow, ExxonMobil, via its local affiliate Esso Exploration and Production Guyana Limited (EEPGL), has already submitted a document outlining its plans to the Environmental Protection Agency (EPA) for the expansion of drilling.

In the submission, the company said that Guyana’s oil reserves could more than double its confirmed nine billion plus barrels of oil equivalent, once drilling commences in the Stabroek and Canje Blocks. These heightened exploration efforts are expected to run until December 2025, with the drilling of some 37 wells at the Stabroek Block alone.

It was only last week that ExxonMobil and its partners made yet another lucrative oil discovery within the Stabroek Block, pushing the nation’s petroleum resources well over 10 billion oil-equivalent barrels.

The latest find at the Cataback-1 well brings the total discoveries within the Stabroek Block to 25, further securing Guyana’s position as home to the third highest oil reserves in the Latin America and Caribbean Region.

Natural Resources Minister Vickram Bharrat said in a statement on Thursday that the government, in transforming the hydrocarbons sector, remains committed to enhancing the exploration and development of Guyana’s oil and gas resources.

The minister further assured that activities within the petroleum sector “will be undertaken in a manner that is in keeping with international best practices for compliance and transparency.”

Additionally, Bharrat said that the Dr. Irfaan Ali-led administration will be working continually through consultations to enhance local content with policies and legislation that will create a sustainable development pathway to ensure maximum economic benefits for all Guyanese.

Guyana’s oil-production and extraction operations are expected to increase significantly with arrival of the Liza Unity, the second Floating Production Storage and Offloading (FPSO) vessel to be operated in Guyana. It has already been constructed and is currently half the way to Guyana and on schedule to arrive in mid-November, 2021, with an anticipated start-up of production in early 2022.

The Liza Unity FPSO has a capacity of approximately 220,000 barrels of oil per day, which will supplement the work of the Liza Destiny FPSO, which is currently producing approximately 120,000 barrels of oil per day, facilitating a production of approximately 330,000 barrels of oil per day in 2022.

QUICKLY AS POSSIBLE
Speaking last month at the Offshore Technology Conference (OTC) hosted in the United States, Vice-President Bharrat Jagdeo recognised that because of the climate change imperative to decarbonise the world, it was also important that Guyana pursues an aggressive mission of “getting as much oil out of the ground as quickly as possible.”

The former President reasoned that Guyana has to maximise benefits from the industry and use those benefits to change the lives of every Guyanese. “We don’t know how swiftly we’ll get to a decarbonised world, but we have to make use of this period when there is still demand to get as much as possible out of the ground, and that is why we support the rapid pace of the industry, but it must be done safely,” he related.

On a local radio programme called, “Guyana’s oil and you,” Jagdeo had said, pointedly, that even with the environmental concerns relating to oil production, Guyana does not have the option of leaving the oil in the ground.

To this end, he said, “There are many people saying now that we should not be producing oil. We don’t have that option in Guyana. Our people badly need development and we have to make sure that we produce the oil and get as much development out of it for our people to invest long term in other sectors, so that they can get wealthier and have a decent life.”

The former Head of State, who has been globally recognised for his efforts to fight climate change, indicated the government’s intention to rely on the advice of experts to ensure that its decision to continue oil production was sound.

“We can’t shut down the industry as some people have been calling for. We are going to be driven by the technical expertise. The oil and gas industry will be vital to our future and we have to do it well,” he said.

The Dr. Irfaan Ali-led government has repeatedly pledged to utilise Guyana’s petroleum earnings to transform and modernise a number of non-oil sectors; more importantly, agriculture.

The President has also said on multiple occasions that all measures are being put in place to ensure that Guyana does not fall prey to the dreaded ‘Dutch Disease’, which has brought doom and gloom to many other countries that have been relying solely on their oil revenues.