Sep 25, 2023 News
…as oil sector expands by 98%
Kaieteur News – With an almost doubled performance of the oil and gas sector in the first half of 2023 when compared with the year prior, Guyana continues to see a trickle of its oil wealth.
The Bank of Guyana (BoG) in its recently released Half-Year Report has indicated that ExxonMobil and its partners have deducted a whopping US$4 billion in revenue from Guyana’s oil during the first six months of the year.
During the same period- January to June 2023- Guyana received a measly share of its wealth from the Stabroek Block, a total of US$658 million.
According to the report, “The capital account recorded a lower deficit of US$238.7 million from US$939.0 million at end-June 2022. This was the result of net outflow of US$658.4 million in oil revenue to the Natural Resource Fund (NRF) and US$4,033.8 million in cost recovery (withdrawal of equity) by the oil and gas sector despite higher inflows to the private sector in the form of Foreign Direct Investments (FDIs).”
The report also highlights a 98.4 percent growth of the petroleum and gas sector during the half year period.
According to the Central Bank, “The industry recorded crude oil production of 68.7 million barrels, an increase of 98.3 percent from the corresponding period last year. The average daily production for the period was 379,334 barrels, an increase of 96.1 percent when compared to the daily average of 228,880 barrels for the corresponding period in 2022, due to the additional FPSO (Floating Production Storage and Offloading Vessel).”
Guyana’s second FPSO, the Liza Unity, achieved first oil in February 2022, while the country’s first FPSO commenced operations in December 2019.
Both vessels have been optimized by the operator of the Stabroek Block, ExxonMobil Guyana Limited (EMGL) to produce beyond the initial targets.
The Liza Destiny is designed to safely produce 120,000 barrels per day (bpd), however the GoG in its Mid-Year Report recently released said that production has been ramped up to 153,000 bpd.
Meanwhile, on the second FPSO, which was designed according to its Environmental Impact Assessment (EIA), to produce up to 220,000 barrels per day, production has been pushed to about 226,500 bpd.
Even though the developer has taken measures to ramp up production with the blessings of the government, revenue to the country has not increased.
This is as a result of the lopsided agreement signed with the Stabroek Block consortium in 2016. The deal allows for 75 percent of the revenue earned to be deducted to recover the investments made in the block.
The remaining 25 percent is then split between Guyana and the partners, with a two percent royalty being paid to the country. This means Guyana receives a meager 14.5 percent of the earnings from the block.
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