Guyana to benefit from higher energy prices, levels of oil production – IDB
Guyana is still in a good position with regard to its oil and gas industry, as the nation is profiting from rising energy prices as well as increased oil production.
A research by the Inter-American Development Bank (IDB) titled “Headwinds confronting the Post-Pandemic Recovery” predicts that prices for some commodities, including oil and aluminum, would remain relatively high through 2024.
Through 2024, the price of oil is anticipated to stay over $80. The character of Guyana’s net trade in agricultural goods and mineral fuels with the rest of the globe has been greatly impacted by these price trends and the country’s greater levels of oil output.
According to the research, Guyana quickly transitioned from being a net importer of agricultural goods and fossil fuels, accounting for 8% of its GDP in 2018 and 2019, to an exporter of those same goods, with a trade surplus with the rest of the world reaching 16% of GDP in 2020 and 31% in 2021.
Prior to the start of oil production, the Caribbean Community (CARICOM) nations were Guyana’s primary suppliers, which contributed to the trade deficit.
Through 2021, the percentage of net exports to these nations rose, reaching 17% of GDP for net exports to North America and 14% of GDP for other nations.
The analysis predicts that these trade surpluses would likely increase as oil production ramps up more.
As part of efforts to develop Guyana’s oil and gas resources, President Dr. Mohamed Irfaan Ali formally announced the first auction for the development of 14 oil blocks in December 2022. New contracts will be awarded by the end of May 2023 after the competitive bidding round closes on April 14, 2023.
Oil blocks for shallow and deep waters are up for auction. For shallow water and deep water blocks, respectively, the minimum signing bonus threshold will be US$10 million and US$20 million. For deep water exports as opposed to shallow water, stricter standards and restrictions are established.
Contractors can acquire access to the virtual data room and take part in the open bidding process by paying a participation fee of US$20,000.
The president pointed out that Guyana’s offshore basin, which has been dubbed the world’s fastest-growing super basin over the previous four years, has captured the interest of participants in the global oil market.
Over 25 billion barrels of oil equivalent are thought to be in offshore Guyana’s potential reserves, while over 11 billion barrels are thought to be in offshore reserves.
The IDB report also stated that, over the next two years, soybean prices are predicted to stay roughly 40% higher than they were prior to the pandemic.
495 acres of soy beans and 366 acres of corn were sown in 2022. Tacama produced more than 400 tonnes of soy beans in 2022.
