With the price of crude oil remaining high internationally, Guyana is projected to earn US$1.1B in revenue from the sale of its share of profit oil, and US$147.7M in royalties by the end of 2022, the Ministry of Finance said in its Mid-Year Report.
Initially, the Finance Ministry had projected that by the end of 2022, US$957.6M would have been deposited into the Natural Resource Fund (NRF), however, the deposits are now projected to be 32.5% higher due to the rise in the cost of crude oil.
According to the Mid-Year Report, for the period January to June 2022, Government had five lifts of profit oil from the two producing Floating Production Storage and Offloading (FPSOs) – Liza Destiny 3 and Liza Unity 2.
“In the first half of the year, Government received US$307 million as revenue from their share of profit oil and US$37.1 million in royalties,” the Finance Ministry detailed.
It added that the cumulative balance, inclusive of interest income, at the end of June was US$753.3M after a withdrawal of US$200M in May.
At the beginning of the year, it was anticipated that Government would have 13 lifts of profit oil from the Stabroek Block, this, according to the Finance Ministry, remains unchanged.
Since May 2015, there have been 38 discoveries offshore Guyana, with 33 of those discoveries occurring in the Stabroek Block. The country’s recoverable resource now stands at approximately 11 billion oil equivalent barrels.
The substantial discoveries have placed Guyana at number 17 for countries with the largest reserves in the world.
According to the Finance Ministry, the wells have been surpassing projected targets.
“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,” the Finance Ministry pointed out.
At the end of June 2022, Guyana’s cumulative profit oil earnings from the Liza Phase 1 well stood at US$747.1M.
With the addition of the Liza Unity FPSO, which came into operation on February 11, 2022, Guyana’s productive capacity is now more than 350,000 BPD. Notably, Liza Unity has the capacity to produce at a rate of approximately 220,000 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,” the Finance Ministry reported.
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.
According to the Mid-Year-Report, 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.
The Finance Ministry said the “Government remains cognisant of the need to take preventative and mitigating actions to guard against the Dutch Disease and the resource curse syndrome.”
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