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| Fig. 1: Global oil production trends, illustrating Guyana's emerging position in the global energy landscape. [1-3] (Image Source: A. Zafar) |
Guyana's rapid rise in global oil production has transformed it from a small, resource-poor nation into a significant player in the energy sector. Driven by major offshore oil discoveries, the country has experienced exponential growth in its oil production, positioning itself as one of the fastest-growing producers globally.
Here we analyze Guyana's oil boom, focusing on its production growth, economic impact, and the geopolitical challenges it faces. Key areas of examination include production capacity, economic efficiency, infrastructure, and export markets, as well as the ongoing territorial dispute with Venezuela over oil-rich regions.
Guyana's oil production has grown exponentially from 15,000 barrels per day (b/d) in December 2019 to 630,000 b/d by January 2024. [1] This forty-fold increase positions Guyana for further growth, with projections indicating potential production of 1.3 million b/d by 2027. [1] To contextualize this growth, looking at Fig. 1, the current global production leaders as of 2021 include the United States (11,188,000 b/d, 14.4% of global production), Russia (10,519,000 b/d, 13.6%), and Saudi Arabia (9,473,000 b/d, 12.2%). [2]
The economic viability of Guyana's operations is evident in its competitive break-even costs of $25-35 per barrel. [1] This positions Guyana favorably against other major producers, where Saudi Arabia achieves costs of approximately $10 per barrel, while U.S. shale operations range from $30-50 per barrel. [3] This advantageous cost structure has supported the rapid development of the country's oil sector.
The development is supported by three Floating Production Storage and Offloading (FPSO) vessels, with the Liza Destiny having 1.6 million barrels of storage capacity. [1] In 2023, the country exported 135 million barrels, with primary destinations being the United States (26%), Netherlands (21%), and Germany (11%). [1] This diversification helps mitigate market risks and strengthens Guyana's global position.
Guyana has experienced unprecedented economic expansion since oil production began, achieving double-digit GDP growth since 2020. The most dramatic increase came in 2022 with a 62% GDP surge, where the oil sector alone contributed 56% of this growth, while non-oil industries added 6%. [1] The International Monetary Fund projects this robust double-digit growth to continue through 2028, representing one of the most dramatic resource-driven transformations in recent history. [1]
Guyana's projected production of 1.3 million b/d by 2027 would place it among significant producers like Brazil (2,905,000 b/d) and UAE (3,293,000 b/d). [1] The country's ability to maintain its competitive cost structure while managing geopolitical tensions will be crucial for achieving these ambitious targets.
© Ahmad Zafar. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute, and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] "Country Analysis Brief: Guyana," U.S. Energy Information Administration, May 2024.
[2] "BP Statistical Review of World Energy," British Petroleum, June 2022.
[3] "Petroleum Watch," California Energy Commission, February 2021.