Home Top Stories Guyana’s economy on course to double in size in 2022-2023 – World...
– says booming oil and gas industry fueling growth
The World Bank is projecting that despite being surrounded by somber economic growth figures in the Caribbean and around the world, Guyana’s economy will actually double in size in 2022-2023.
The World Bank announced growth prospects for Guyana, other Caribbean countries and the world in its updated Global Economic Prospects report. In Guyana’s case, the World Bank expects that the economy will double in size from 2022 to 2023.
This, according to the World Bank, is due to the rapid development of the offshore oil and gas industry. In a further breakdown, the world bank noted that Guyana’s economy would grow by 47.9 per cent this year and 34.3 per cent in 2023- the highest in the Latin America and Caribbean region.
Real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy (in this case, Guyana’s economy) in a given year. In simpler terms, the real GDP measures a country’s total economic output, adjusted for price changes.
“In addition, Guyana’s economy is forecast to double in size in 2022-23, on account of the rapid development of the offshore oil and gas industry. In Jamaica, increasing alumina production will boost exports, though dependence on imported oil will weigh on the current account,” the report stated.
This is a reduction of 1.8 per cent on the 2022 figures and a 9.3 per cent increase on 2023. Elsewhere, a robust growth of 6.9 per cent is projected for the Caribbean this year, dropping modestly to 6.5 per cent in 2023.
“For the Caribbean, robust growth of 6.9 percent is forecast for 2022, slowing slightly to 6.5 percent in 2023. The continued, but incomplete, recovery of tourism towards pre-pandemic levels is an important driver of growth, supporting exports, employment, and investment,” the World Bank added.
Overall growth in Latin America and Caribbean (LAC) is expected to slow to 2.5 per cent in 2022. Globally, economic growth is expected to be approximately 2.9 per cent… a reduction of the original 4.1 per cent forecasted in January.
Guyana, through oil giant ExxonMobil, began producing oil back in 2019. Since then, Guyana’s economic growth has taken off. Exxon has also said it anticipates at least six projects offshore Guyana will be online by 2027.
The oil company had said that their Liza Phase 2 project, where drilling started this year, will have the capacity to produce 220,000 barrels of oil per day. Exxon had also revealed that the Liza Phase 2 development was funded at the cost of some US$6 billion, including a lease capitalization cost of approximately $1.6 billion, for the <<<Liza Utility>>> FPSO vessel. For the Phase 2 development, six drill centres were planned, along with approximately 30 wells – 15 productions, nine water injection and six gas injection wells.
The US$9 billion Payara development, the third development, will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels and was at one point considered to be the largest single planned investment in the history of Guyana.
The Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will turn out to be the single largest development so far in terms of barrels per day (bpd) of oil, with a mammoth 250,000 bpd targeted.
These new projects continue to contribute to the advancement of the Guyanese economy. More than 2600 Guyanese are now supporting project activities on and offshore, which reflects an increase of more than 20 per cent since the end of 2019. ExxonMobil and its key contractors have spent over US$300 million with more than 800 local companies since 2015.
The Stabroek Block is 6.6 million acres (26,800 square kilometres). ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 per cent interest.