…says GDP growth rate now projected at 37.2%, non-oil economy growing
Guyana’s inflation and unemployment rates are moderating and, on the decline, respectively, even as its economy continues to grow at an astronomical pace with Gross Domestic Product (GDP) growth for this year now pegged at 37.2 per cent.
This is according to the Inter-American Development Bank (IDB) in its “Caribbean Economies at a Crossroads” report which was recently released. In it, the bank notes that Guyana’s high-rate economic growth, driven by a growing oil production sector, has played a major role in unemployment rates declining and access to finance for the private sector improving.
“Recently, a new oil discovery was made, a new oil production vessel arrived in Guyana, and a fifth oil production licence was approved. Against this backdrop, unemployment rates have declined, inflation rates have moderated, and lending to the private sector grew,” the IDB explained in the report.
The Prosperity FPSO
While there have been persons claiming that they are unemployed, the Government has consistently said that not only is Guyana on a trajectory of constant growth that would provide even more higher-paying jobs, but the current economic growth has already opened up enough jobs for the number of people unemployed. In fact, there have been consistent reports of more jobs being available than can be filled locally, leading to discussions about importing labour.
Meanwhile, the IDB has also projected that Guyana will record a GDP growth rate for 2023 of 37.2 per cent, while the non-oil economy, of vital importance for an oil producer to avoid the Dutch disease, has a projected growth rate of 7.9 per cent from the IDB. Guyana’s GDP growth, according to IDB, will continue to expand with the arrival of the third Floating Production and Storage Offloading (FPSO) vessel, the Prosperity FPSO, later this year.
“GDP growth is expected to continue expanding in 2023 with the arrival of Guyana’s 3rd FPSO. GDP grew by a record 62.3% in 2022, on the back of increased oil production, and is expected to grow by an additional 37.2% in 2023. Guyana’s 2nd FPSO (Liza 2) began production in February 2022 and a 3rd FPSO arrived in Guyana ahead of schedule in April 2023, yet to begin oil production.”
“The non-oil economy grew by 11.5% in 2022 and is projected to grow by 7.9% in 2023. The main drivers of growth in the non-oil economy in 2022 were agriculture, services, and construction, which grew by 11.9%, 9.0%, 26.3%, respectively. For 2023, these sectors are projected to grow by 7.2%, 5.6%, and 17%. Gold production, which had contracted by 2.5% in 2022, is expected to recover with a growth rate of 12.7% in 2023,” IDB stated in their report.
Constructed by SBM Offshore, the Prosperity FPSO arrived in Guyana earlier this year and will develop the Payara field offshore the Stabroek Block. It has an initial production capacity of around 220,000 barrels of oil per day and an overall storage volume of two million barrels.
Prosperity joins the Liza Destiny and Liza UnityFPSOs, which are currently producing more than 380,000 barrels per day. Production from the Prosperity vessel is expected to push daily production to some 600,000 barrels a day in 2024. ExxonMobil has already said that installation campaigns are ongoing and development drilling is underway to support Prosperity’s start-up later this year.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being held in the Natural Resource Fund (NRF) at the New York Federal Reserve Bank, where it is earning interest.
The oil rich Stabroek Block, which is producing the oil, is 6.6 million acres (26,800 square kilometres). Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), is the operator 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.
Since last year, Guyana has been recording weekly lifts in the Stabroek Block, with oil production now at 340,000 barrels per day from the Liza Destiny and Liza Unity FPSO vessels. With EEPGL making weekly lifts, Guyana’s crude entitlement of one million barrels occurs monthly from the two FPSOs.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. Production has already started in the second phase, with the Liza Unity FPSO vessel in operation.
The third project – the Payara Development – will 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. (G3)
