60% increase in Guyana’s crude sale to offset decreases in gold, timber, bauxite exports – ECLAC report

Dec 11, 2024 News

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Kaieteur News- Guyana’s booming oil exports have offset significant declines in the export volumes of gold, timber, and bauxite, driving the nation’s trade growth in 2024.

According to the International Trade Outlook for Latin America and the Caribbean 2024, published this month by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), foreign sales of crude oil surged by over 60% during the first half of the year.

“In Guyana, foreign sales of crude oil, the country’s main export product, increased by more than 60%, offsetting decreases in the volume of gold, bauxite and timber exports,” it was stated.

Oil is being produced from the Stabroek Block offshore Guyana by a consortium led by ExxonMobil. That block which covers an area of 6.6 million acres is estimated to hold 11.6 billion barrels of oil. To date, Exxon has obtained approval from the Government of Guyana for six development projects in the Stabroek Block – Liza Phase One, Liza Phase Two, Payara, Yellowtail, Uaru and Whiptail. The first three projects are already producing oil at a daily estimated rate of 640,000 barrels per day (bpd). In relation to Guyana’s mining sector, this publication has repeatedly reported that for the past several years, the country’s gold declaration has seen a notable decline.

Moreover, ECLAC also notes favourable terms-of-trade conditions for Guyana. “In hydrocarbon-exporting countries, the terms of trade are expected to deteriorate by an average of 2%. The most affected countries in this group include Colombia, the Plurinational State of Bolivia and Trinidad and Tobago, with exceptions being Ecuador and Guyana…Guyana is also expected to receive a positive terms-of-trade shock as a result of increases in the unit value of its exports of oil (2%), gold (19%), and rice (6%), together with lower prices among various imported inputs and food products,” it was stated.

The report highlights crude oil, which represents 84% of Guyana’s export portfolio, as becoming the backbone of the nation’s trade sector.

“The countries reporting the strongest growth of export value in the first half of the year were Guyana, the Bolivarian Republic of Venezuela and Suriname. In all three cases, larger export volumes, especially of crude oil, are the main cause of the increases. In the Bolivarian Republic of Venezuela, the growth of exports reflected the granting of licences by the Government of the United States to foreign firms to operate in that country and export oil to the United States,” the report states.

The ECLAC report highlights that Guyana’s overall export value is projected to grow by an impressive 77% in 2024, the highest among Latin America and the Caribbean. This growth stems primarily from the country’s increasing oil production, with rising volumes offsetting a 2% decline in global oil prices.

“The largest increases in export values in 2024 are projected in Guyana 77%, the Bolivarian Republic of Venezuela 38%, Argentina 21% and Suriname 18%. All these are attributable mainly to the upsurge in the volume of commodities exports, in particular oil and agricultural products…” it was stated.

In another section of the report, it was noted that the largest increases in export value in 2024 are projected to occur in Guyana, Venezuela, Argentina and Suriname. It was explained that while in Argentina, this is due to an increase in the volume of its crop exports following the drought that affected them in 2023, in the other three countries’ cases, the chief factor would be the increase in the volume of oil exports.

Additionally, it was stated that Guyana’s positive trade outlook has contributed to the Caribbean sub-region’s projected export volume growth.

ECLAC projects that the value of goods exports from Latin America and the Caribbean will increase by 4% in 2024 as a result of a 5% increase in volume and a 1% decrease in prices. Growth in imports is projected at 4% by volume and -2% by price, for an overall 2% increase in value. This forecast would amount to a recovery from the regional decline suffered in 2023.

The report highlights, “The Caribbean and South America are expected to experience the largest export increases in terms of value and volume. In the Caribbean, the volume of exports is projected to expand by 24% thanks to a marked increase in volume from Guyana by 74% and Suriname by 12%. In South America, the volume of exports is expected to increase for agricultural products like soybeans, maize and wheat, which grew at rates of 70%-100% in the first half of the year. This expansion will more than offset falling prices for several South American commodities exports.”

(60% increase in Guyana’s crude sale to offset decreases in gold, timber, bauxite exports – ECLAC report)

(increase in Guyana’s crude sale)

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• ECLAC, export, gold, LAC, oil, TRADE

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