When one takes into account, the quality of the reserves in the golden Stabroek block, along with the fact that the phased development of the resources found, will lift output to over 1.1 million b/d by 2028, Guyana will become just the 11th nation in oil’s history to reach the million b/d milestone. This is according to Chief Analyst and Chairman of Woodmackenzie, Simon Flowers.
In one of his publications on Guyana’s oil wealth, Flowers said that these barrels are mostly light, meeting the market’s increasing need for relatively low-carbon-intensity liquids. He said that they are also low cost – the breakeven of under US$30/bbl competes with the very best of new projects, conventional or unconventional.
Further to this, Flowers said that the giant oil fields will deliver untold riches to the nation of only 0.8 million people. The Chairman continued, “Guyana will, as output builds, rise to be king of the heap. Production per capita will eclipse even that of the leading Middle East producers, Kuwait, UAE and Saudi Arabia.”
Flowers was keen to note as well that the country’s economy will be transformed. In this regard, he pointed out that annual capital expenditure on the project will average US$4 billion a year this decade – the same as 2019 Gross Domestic Product. The Chairman said that much will be spent on production equipment outside Guyana, but considerable investment will flow into infrastructure onshore and offshore to support the growing oil industry.
With respect to revenue from royalty and tax which started flowing this year, Flowers said this is poised to climb progressively to an annual peak of US$13 billion by 2029 based on Woodmac’s calculations. Additionally, he said that annual tax income will average US$7 billion over the next 20 years – almost double 2019 GDP.
After averaging 2.9% annually this century, Wood Mackenzie forecasts a 78% rise in 2020; adding more to GDP in one year than the economy has accumulated since 1960.