Oil revenues to be used to close developmental gaps, implement plans to be globally competitive – President Ali

President Irfaan Ali

As Guyana’s oil industry continues to boom, the revenues will be used to close existing gaps in various sectors while creating new opportunities so that the country could become globally competitive.
These were the sentiments of the Guyanese Head of State at a recent engagement with the press while noting that the revenues will also be used to better the lives of all Guyanese.
This means ensuring equality in opportunities and newer investments to boost socio-economic development.
“We have made it very clear that the oil revenue must be linked to something broader. The oil revenue must be used to one: strengthen existing opportunities in our country and two: to open up new opportunities. New opportunities for investment, new opportunities for economic growth and new opportunities for social development,” Ali indicated.
Some of the current gaps, he identified, exist within the public system and the delivery of key services in the country. With this under control, Government can also look at bolstering its agriculture sector to become a key player in the regional market.
“In creating those opportunities, we have to ensure that there is equity and that there is no widening between those who have and those who don’t have. The resources have to be used to close that gap, so healthcare, education, food security, housing are all areas that are critical in closing that gap. Whilst we open up new opportunities for ownership of land, farming, agriculture, realising our potential to become the prime supplier of food regionally.”
The Head of State added that oil revenues will also be expended in creating a strong energy mix for the country, which will create a ripple effect in the manufacturing and services industries. With lower costs, Guyana can be globally competitive in marketing local products.
“We have to look at investments to create the energy mix that would not only satisfy our local demand but that will be part of the energy corridor that is currently being discussed along the Guyana Shield. Then we have to look at how we’re going to use the resources to open up new opportunities in manufacturing, industrial development just to bring down the cost of energy, lower the cost of production, lower the cost of finished goods so that be globally competitive,” the President outlined.
Keeping with the goal of creating a productive workforce, he foresees a better infrastructure to rid the current traffic woes in the country. In recent years, the coastal corridor has been plagued with vehicular traffic during peak hours – a loss of both time and money.
“Of course, then we have our national infrastructure. We cannot continue using thousands of manhours every day in traffic. We have to understand that our country is growing, that the need for infrastructure is expanding so these are areas that we have to target…We cannot increase productivity in this environment.”
In March, the PPP/C Government had confirmed that the country received payment for the fifth oil lift, deposited directly into the country’s Natural Resource Fund (NRF) at the New York Federal Reserve Bank.
“On February 5, 2021, 997,420 barrels of oil were lifted from Liza Destiny with a value of US$61 million with a grand total to date of 5,009,797 barrels of oil worth US$246.5 million. Inclusive of royalties, the total in the Natural Resource Fund Account now stands at US$267.6 million,” the release said.
In providing a recap, the Ministry explained that Guyana received its first payment of US$54.9 million for an oil lift dated February 19, 2020. Guyana’s second lift on May 21, 2020, was valued at US$35 million. The third lift, which occurred on August 9, 2020, was valued at US$46 million, while the fourth lift occurred on December 9, 2020, and came in at US$49.4 million in value.
The Stabroek Block offshore Guyana 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.
Exxon has so far made 19 oil discoveries offshore Guyana, discoveries which have been credited with being a major source of cash flow for the oil giant. Only last week, oil was found in Exxon’s Uaru-2 well.
The start-up of Liza Phase 2 remains on target for 2022, as the Liza Unity FPSO prepares to sail away from Singapore to Guyana later this year. The Unity FPSO has a production capacity of 220,000 barrels of oil per day at peak rates. The hull for the Prosperity FPSO vessel, the third project at the Payara Field, is complete, and topsides construction activities have commenced in Singapore with a startup target of 2024.
These new projects continue to drive investment in the Guyanese economy. More than 2300 Guyanese are now supporting project activities on and offshore, which reflects a more than 20 per cent increase since the end of 2019. ExxonMobil and its key contractors have spent approximately US$388 million with more than 800 local companies since 2015.