During his presentation of the 2021 budget on February 12, last, Senior Minister with responsibility for Finance within the Office of the President, Dr. Ashni Singh, disclosed that the daily rate of production for 2021 is expected to be “just over 109,000 barrels of oil per day.”
This, however, is already inconsistent with the reality offshore Guyana. In fact, Chief Executive Officer (CEO) of ExxonMobil’s local subsidiary, Alister Routledge, had revealed since February 8, last, during a virtual engagement with the media that the company was producing 130,000 barrels up to January. This was subsequently reduced to the Liza Destiny’s nameplate capacity of 120,000 barrels of oil per day after January 29, last. The reduction was a consequence of further mechanical issues experienced with the vessel’s gas compressor system. The faulty equipment is currently undergoing repairs and upgrades in Germany. Guyana Standard understands that the repairs to the gas compressor could take as long as 8 weeks.
Furthermore, Hess Corporation’s Chief Operating Officer, Greg Hill disclosed during his company’s 2020 fourth-quarter earnings call that ExxonMobil intends to increase the oil production capacity of the Liza Destiny since it was delivering well beyond the 120,000 barrels per day since late last year.
While noting that the oil and gas subsector is projected to grow by 46.7 percent in 2021, Dr. Singh disclosed that the government is predicting a 4 percent year-on-year increase in the Brent crude price to around US$43.9/bl. It is important to note that this price forecast is well below the current Ice front-month April Brent crude futures contract price of more than US$63/bl. (The ICE Brent Index represents the average price of trading in the prevailing North Sea ‘cash’ or forward market in the relevant delivery month as reported and confirmed by industry media.)
While oil revenue drove up Guyana’s Gross Domestic Product (GDP) by 43.5 percent in 2020, growth is expected to drop to 20.9 percent in 2021. Oil revenues thus far are over US$206M.