Business
Guyana’s Oil Boom: Prosperity and Challenges Ahead
Once considered a peripheral player in South America, Guyana has emerged as a thriving hub of economic activity, propelled by its recent leap into the forefront of the global oil market.
The small nation, boasting a population of around 800,000, experienced a remarkable 38% surge in its GDP in 2023, following a staggering 63% increase the previous year, signaling a remarkable economic transformation.
It all began in 2015 when ExxonMobil made the groundbreaking discovery of the Liza-1 oil well, situated off Guyana’s Atlantic coast, setting off a chain of events that would redefine the country’s economic landscape.
Partnering with local government entities and companies such as Hess Guyana Exploration and CNOOC Petroleum Guyana, ExxonMobil spearheaded exploration efforts in the expansive Stabroek Block that uncovered a series of massive oil and gas reserves.
Schreiner Parker, a distinguished figure at Rystad Energy specializing in Latin America and the Caribbean, described the Stabroek Block as a site that has witnessed unprecedented exploration activities, setting the stage for Guyana’s economic boom.
As global oil prices surged in the aftermath of the Covid-19 pandemic, coupled with a shift towards alternative energy sources, Guyana’s economy catapulted forward on the back of the monumental Liza-1 oil discovery, achieving growth rates averaging above 40% annually since 2020.
Looking towards the future, insights from BMI, a leading research firm, forecast continued growth for Guyana, fueled by the prospect of new oil discoveries, heightened production levels, and escalating geopolitical tensions, projecting a staggering GDP expansion of 115% by 2028, positioning Guyana as the world’s fastest-growing economy.
However, harnessing this newfound oil wealth effectively to ensure sustained progress for Guyana’s populace will require deft maneuvers to sidestep the looming threat of ‘Dutch disease,’ a phenomenon where an economy overly reliant on a single commodity risks overshadowing other sectors due to inflated domestic prices.
