Expanding Oil Production Will Drive Guyanese Growth Surge In 2022

• Fitch Solutions projects GDP growth in Guyana will reach 46.0% in 2022, from 19.9% in 2021, as the expanding oil sector will fuel a surge in growth. Oil production and exports have underpinned the Guyanese economy since ExxonMobil began production from the Stabroek block in Q4 2019. The first producing project, Liza-1, surpassed production expectations of 104,000 barrels/day (b/d) in 2021, with actual output of 110,000 b/d. 
• It is expected that production from ExxonMobil’s second floating platform project, Liza 2, which came online ahead of schedule in February 2022, will provide additional oil production in the coming months. In turn, higher oil revenues will fund greater government expenditures which will spur growth in the non-oil economy. Elevated oil prices, strong demand for energy and additional exploration offshore will sustain export and investment growth in 2022. 
• Goods exports will grow 61.0% in 2022, as Fitch’s Oil & Gas team recently revised its oil production forecast for Guyana to 234,500 b/d in 2022, from 147,600 b/d previously, due to ExxonMobil’s ability to deliver robust output growth from two existing offshore projects over the coming months. 
• In addition, oil prices will average USD100.0/barrel in 2022 due to the lingering impact of the Russia-Ukraine conflict, incentivising additional domestic production. Finally, upstream investments are expected to remain high over the near term as the ExxonMobil-led consortium continues to prioritise Guyana’s assets in their capital expenditure plans and prices remain elevated.

(Source: Fitch Solutions)