Guyana produced 42.7 M barrels of oil in 2021 – Minister Singh

For the year 2021, Guyana produced 42.7 million barrels of light, sweet crude from the Liza One development in the prolific Stabroek Block. This was announced by Senior Minister in the Office of the President with responsibility for finance, Dr. Ashni Singh when he presented Budget 2022 last week.

The 42.7 million barrels of oil (b/o) is a significant increase to the 27.2 million that had been produced in 2020. Minister Singh linked this increase in production due to remedying of the gas compressor onboard the Liza Destiny floating production storage and offloading (FPSO) vessel that had encountered mechanical issues.

Guyanese onboard the Liza Destiny floating production storage and offloading (FPSO) vessel in the Stabroek Block

“The oil production rate for 2021 is now estimated at approximately 116,900 barrels of oil per day (bpd),” the finance minister said. “The increased level of production resulted in the subsector’s value-added increasing by an estimated 46.5 percent.”

Dr. Singh reminded that since the commencement of oil production in December 2019 to the end of 2021, there were 69 lifts of oil exported from Guyana, of which nine were for government. In March 2020, the US$54.9 million proceeds from Guyana’s first lift of crude oil were deposited into the Natural Resource Fund (NRF), followed by the first royalty payment of US$4.9 million at the end of April 2020.

The fund had received US$185.4 million from four lifts of profit oil and US$12.9 million from royalties for the period March 2020 to December 2020. In 2021, the fund received US$357.2 million from government’s share of profit oil, and US$52 million from royalties, and at the end of the year, the fund’s cumulative balance stood at US$607.6 million.

Meanwhile, with the Liza Unity FPSO set to start producing oil at the end of March 2022, Guyana’s daily oil product will raise capacity to 340,000 barrels of oil per day (bpd).

The Liza Destiny Floating Production Storage and Offloading (FPSO) vessel in the Stabroek Block

“The deployment of the Liza Prosperity FPSO in 2024 will further raise capacity to 560,000 bpd,” the finance minister said. “With the anticipated fourth production area, Yellowtail, estimates are poised to reach 810,000 bpd by 2026/27 and additional developments under consideration could see us reaching six FPSOs producing one million bpd by 2030.”

Meanwhile, development works on Payara and Yellowtail are ongoing and the exploration programme will continue in 2022. The operators in the Kaieteur and Canje Blocks also advanced exploration programmes in 2021, with additional wells likely to come online in the last quarter of 2022. In addition, exploration activities will continue in the Kanuku Block. Notably,

Canadian oil and gas company CGX Energy announced news of an oil discovery in the Kawa-1 well in the Corentyne Block. This discovery was made after two decades of exploration by the company.

The finance minister said that as a new oil and gas producer and the country with the 17th largest oil reserves in the world to date, Guyana’s oil and gas sector promises to be the driver of historically high levels of growth in the Guyanese economy with strong positive spillovers into the non-oil economy. This, he said, is already observed in the country’s economic performance over the past two years, and the external environment remains supportive with demand for oil anticipated to exceed pre-pandemic levels in 2022 and a very positive near-term outlook.

Importantly in the third quarter of this year, government will be holding auctions and bidding rounds for available acreages of offshore blocks. Dr. Singh assured that this will be done in an open and competitive manner which will allow for a more marketable approach to Guyana’s resource development and at same time bring financial gains for the country.