(Energy Analytics Institute, 26.Jan.2022) — Highlights from the budget speech by Guyana’s Honourable Dr. Ashni K. Singh, M.P. Senior Minister in the Office of the President with Responsibility for Finance on 26 January 2022 follow.
Select highlights:
— A total of 42.7 MMbbls were produced in 2021 compared with 27.2 MMbbls in 2020.
— Real GDP is estimated to have grown by 19.9%, while non-oil GDP is estimated to have grown by 4.6% in 2021, despite the persistence of COVID19 as well as the impact of the floods.
— Output in the bauxite mining subsector is estimated to have declined by 3.8% in 2021.
The gold mining subsector is estimated to have contracted by 14.8% in 2021, driven by lower output from both large and small and medium scale producers.
— Current estimates show that the construction sector grew by 29.8 percent when compared with 2020, underpinned by both the major public infrastructure buildout that is currently underway…
— The immediate aftermath of the flood resulted in a sharp spike in prices, but as production returned to some normalcy, some amount of reversion was observed in the latter months of last year, leading to a 12-month inflation rate of 5.7% in December 2021.
— From the commencement of oil production in December 2019 to the end of 2021, there were 69 lifts of oil exported from Guyana, of which 9 were for government. In March 2020, the $54.9mn proceeds from our nation’s first lift of crude oil were deposited into the Fund, followed by the first royalty payment of $4.9mn at the end of April 2020. The Fund received $185.4mn from four lifts of profit oil and $12.9mn from royalties for the period March 2020 to December 2020. In 2021, the Fund received $357.2mn from government’s share of profit oil, and $52mn from royalties, and at the end of the year, the Fund’s cumulative balance stood at $607.6mn.
— At the heart of our original and pioneering Low Carbon Development Strategy (LCDS) was a mechanism to monetise the value of forest climate services, under which Guyana was eligible to earn up to $250mn through a partnership with the Government of Norway. Regrettably, during the period 2015 to 2020, over $135mn of those revenues, well over half of what had been earned, was ignored and left unallocated.
— Ongoing exploration activities have continued to yield positive results, with 28 commercially viable oil discoveries to date in the Stabroek Block and an estimated recoverable resource of over 10 billion oil-equivalent barrels, a mere 6 years after first discovery. The Stabroek Block currently has three identified production areas Liza 1, Liza 2, and Payara. Production capacity is currently at 120,000 bpd with the Liza Destiny FPSO in operation. The coming into operation of the Liza Unity FPSO early in 2022 will raise capacity to 340,000 bpd, and the deployment of the Liza Prosperity FPSO in 2024 will further raise capacity to 560,000 bpd. 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 6 FPSOs producing 1 million bpd by 2030.
— Additionally, the current estimate of the gas reserve is 16 Tcf) with projections from Liza 1 and 2 likely at 50 MMscf/d) and Payara will bring an additional 20 MMscf/d. This augurs extremely well for the Gas-to-Energy Project that I will discuss later.
— In 2021, the gold mining subsector represented 8.8% of our GDP – the third largest non-oil sector of our economy – and more than 60% of our total non-oil export earnings.
— The management of solid waste across the Regions has posed several difficult challenges in terms of disposal.
— The estimated size of the 14-35 years age cohort is 280,501, over 36 percent of our population.
— The governance architecture of this government is based firmly on inclusivity, participation, transparency and accountability, and the rule of law. It is grounded in the concept and policy thrust of a One Guyana. T
— In 2022, our government will continue to pursue a robust foreign policy guided by the main thrust of our domestic agenda. The preservation of our sovereignty and territorial integrity remains of paramount.
— The overall balance of payments is expected to register a surplus of $403.4mn, largely attributed to projected improvement in the current account.
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By Aaron Simonsky. © Energy Analytics Institute (EAI). All Rights Reserved.
