NEWS agency Reuters has reported that Guyana sold its first share of crude oil from the country’s newest offshore production facility to Exxon Mobil (XOM.N) for about US$106 million.
Guyana earns from both sale of its own share of production and royalty payments. The shipment is the Government’s share of production.
The country’s department of public information outlined that Guyana expects US$957,874,800 revenue in 2022, US$1,165,443,900 in 2023, US$1,335,315,100 in 2024, and US$1,781,842,700 in 2025. These figures, accounting for profit from oil, royalties, and interests, amount to US$5,240,476,500. In Guyana’s currency, that amounts to nearly $1.1 trillion.
The new funds received this April will be used in the short term to build roads, bridges, houses, gas-fired power plants, and solar energy projects, said Reuters.
Guyana, which previously borrowed from the World Bank to diversify energy sources, now has a new way to finance development in this area.
In 2019, a World Bank report said that the oil and gas sector was expected to impact the economy through demand for services and infrastructure, job creation, and the potential provision of cheaper and cleaner electricity.
The report, quoted on oilnow.com, said then that average electricity prices in Guyana are currently among the highest in the world, due to a large extent to the country’s dependence on oil-based products power generation and relatively high technical and commercial losses. Eighty-seven per cent of total installed capacity in 2016 used oil-based products to generate electricity.
The World Bank, in that year, made available a US$20-million initiative to build human resource capacity in the sector, which would help to enhance Guyana’s ability to prepare for the effective management of oil revenue.
According to Reuters, Exxon, which operates the prolific Liza offshore project, last month said it and partners CNOOC (0883.HK) and Hess Corp (HES.N) plan to produce up to 1.2 million bpd of oil and gas offshore Guyana by 2027.
The Unity Gold crude cargo will be the fourth to be exported from the Liza Unity FPSO, which arrived in Guyanese waters in October and began output in February.
The Government, which had a previous arrangement with a unit of Saudi Aramco for marketing its share of crude, said it will work to ensure the country receives the best price for exports both for Liza and Unity Gold crudes.